Bitcoin and Cryptocurrencies are Exempt from UAE's Virtual Currencies Ban

The Central Bank of the United Arab Emirates (UAE) has clarified its policy regarding the use of bitcoin and all other Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term after causing a small stir among the country's fintech community.

To unlock the Asian market, register now to the iFX EXPO in Hong Kong

After new regulations that came into affect at the start of 2017 read that "all virtual currencies (and any transactions thereof) are prohibited", bitcoin exchanges and other cryptocurrency startups in the UAE feared that their operations had become illegal. This could have hurt efforts to cultivate the country's fintech ecosystem in contrast to the stated purpose of the move.

However, after this was pointed out, UAE central bank governor Mubarak Al Mansouri issued a response to local newspaper Gulf News: "These regulations do not cover 'virtual currency' which is defined as any type of digital unit used as a medium of exchange, unit account, or a form of stored value. In this context, these regulations do not apply to bitcoin or other crypto - currencies, currency exchanges, or underlying technology such as Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term."

And here is the statement I received from the office of H.E. Mubarak Al Mansouri, Governor of the Central Bank, yesterday morning: pic.twitter.com/xNZ9j8CmUv

— Ed Clowes (@EdClowes) February 1, 2017

Last month it was revealed that Blockchain, the bitcoin wallet provider and developer of cryptocurrency and distributed ledger software, is set on a big expansion of its operations in the markets of the Middle East. Its chief executive Peter Smith said at the World Economic Forum 2017 at Davos: “I am very optimistic about the Middle East and we plan to invest big there. I’m really excited about it. It’s a great chance to build a new financial infrastructure in the region. What’s exciting is that there’s this big drive for change in the economies. Saudi Arabia and the UAE want to leapfrog into the digital age in financial technology.”