Crypto License
The UAE is one of the most popular countries for cryptocurrency investors and traders. The country has a developed financial system and is considered to be one of the most important locations for blockchain technology and crypto mining.
The DMCC is responsible for issuing licenses for cryptocurrency and blockchain companies operating in Dubai. The license for cryptocurrency in Dubai is similar to the crypto-license for other countries. It allows you to operate a legal business with cryptocurrencies, including storing them and providing services to customers.
The UAE has been a pioneer in the field of crypto regulation. In December 2018, the country’s financial regulator issued regulations for blockchain-based businesses and digital assets. The UAE is one of the most promising markets for blockchain technology in the Middle East region.
What is a Blockchain?
A block chain is a distributed database that is shared among the nodes of a computer network. The blockchain stores information digitally
- Blockchains can be used for many reasons, they are popular for their role in cryptocurrency systems.
- Blockchain is like a similar database. The difference between a database and a blockchain database is that the data is stored in blocks.
- New data is stored in a fresh block. Once the block runs out of storage, a new block is created while there is a link made with the previous block. This is how the data is chained in an order.
- Blockchains are mainly decentralized, that means that not one person or an entity controls it, but everyone holds collective control
- The decentralized blockchains are binding, it’s permanent and can be viewed by anyone.
What is a Crypto Currency?
Cryptocurrency is a decentralized digital currency, there is no physical existence of it.it can be issued digitally only by the process called mining.
In easy words, we can tell that the process of mining is solving complex puzzles. Once it is successfully completed, a new block will be added to the blockchain to reward the miner.
Storage of cryptocurrency is done in online exchanges, digital wallets or hardware wallets.
The most popular cryptocurrency having beneficial use cases are Bitcoin (BTC), Ethereum (ETH), US Tether (USD).
What Is A Crypto License?
A crypto license is a document that allows businesses to operate with digital currencies under certain conditions. Obtaining a crypto license in Dubai requires filing an application to the DMCC.
7229-99 Distributed Ledger Technology Services
This activity includes providing database management solutions and ancillary services based on distributed ledger technologies such as Blockchain. Companies with this activity are not permitted to trade in or set up an exchange for currencies or cryptocurrencies or provide any financial activity services, brokerage or payment processing.
6599-92 Proprietary Trading in Crypto-communities
This activity includes the buying and selling of crypto-commodities developed on distributed ledger technology. This activity does not include acting as an exchange, providing brokerage services, financial services, banking services, payment processing or storage services
7229-97 NFTs E-Marketplace Provider
This activity includes firms engaged in providing an online platform for the buying & selling of third parties unique digital assets (NFT) and facilities commercial interactions between buyer and seller in return for a commission or remuneration. The online platform cannot be used to trade or promote crypto commodities, cryptocurrencies or NFT covering any regulated products or securities
7229-98 Metaverse Service Provider
This activity includes firms engaged in the development and
hosting of digital virtual environments, which enable simulated interactions
between individuals. Companies with this activity are not permitted to issue
tokens which are traded on exchanges or trade in crypto commodities.
What are the requirements of a crypto license?
- A commercial license form (requiring the following documents)
- ID
- Supporting documentation for registered address of residency
- Supporting documentation verifying company’s name
- Comprehensive business plan
- Passport copies of all partners in the business
- A clean crypto wallet with no fraudulent behavior or activities
- In a business runway of at least 6 to 12 months of operation, There must be enough capital to operate the business for at least 6 months successfully.
- Incorporation of crypto assets with the “UAE Free Zone” departments that are approved by the government
- A detailed business plan
Benefits of having Cryptocurrency licenses are:
- Availability of 100% foreign ownership of a local company – it is not necessary to search for the local sponsorship
- Zero restrictions on transfer of the income and capital of a company;
- Favorable tax regime – 0% corporate income tax
- Zero currency restrictions;
