Cryptocurrencies have been one of the most polarizing concepts of the 21st Century, which have divided the world into two major fractions. First, who believe that Bitcoin is revolutionary, and is the future of global monetary systems. Second, who think that crypto is the threat of the sovereign governments of all the countries.
The debate, which has been alive for almost a decade now, got refueled after technology giant Facebook announced their ambitious crypto project Libra, and ever since, reactions from all over the world seem to be growing, with no signs of slowing down. The latest of these countries iterating their stand on crypto is the United Arab Emirates, the land which has been quite favorable for crypto projects. However, that might soon change, as the Central Bank of the UAE has stated that it doesn’t approve any private cryptocurrencies, and to break the hearts of enthusiasts, almost every digital coin, including Bitcoin, Ethereum, Dash, Litecoin, etc., is a private token.
In answer to an article published on an online portal, which claimed that the Governor of the Central Bank of UAE (CBUAE) endorses a private crypto trading platform, the CBUAE released an official statement that it doesn’t endorse any such platform, called the portal that published the article as a “potentially fraudulent website.” The apex banking authority in the Gulf country said,
“The Central Bank does not approve any private cryptocurrencies or schemes and has not issued any licences in the UAE. CBUAE believes that private cryptocurrencies pose potential risks related to price volatility, money laundering, and terrorist financing.”
Those who have been following statements by political leaders on the crypto industry will soon remember that similar criticism was made by Donald Trump a few months ago. The US President had said,
“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behaviour, including drug trade and other illegal activity. Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability… We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!”
What’s common in the statement by CBUAE and the earlier one made by President Trump is that both of them accuse private or unregulated cryptocurrencies of facilitating illegal activities like terrorism and drug trafficking. However, several reports recently and even in the past have shown that such anti-social activities are carried on significantly more on cash than crypto.
The statement by the CBUAE comes at a time when major economies in the world are criticizing crypto, and Bitcoin itself is on a severe downfall, priced below $7,500, which significantly lower than the yearly high of $13,500. Several crypto companies have settled in the UAE in the last few years. In fact, there were reports earlier this year that the governments of UAE and Saudi Arabia were to launch a joint crypto program, which would assist the joint cross-border trade between the countries.
Does this mean that crypto companies will be banned?
Not really. UAE is an Islamic country and has a mixed approach towards policy-making. For instance, the UAE Government doesn’t promote the sale of alcohol, and hence, any advertisement of alcohol is banned. However, selling and consuming alcohol isn’t illegal, though the sale of alcoholic beverages requires licensing. After the statement of UAE, it would be too pessimistic to say that crypto will be made illegal, but some sort of strict and stringent regulatory policing should be expected.