NFT Regulations in the Middle East :
NFT Regulations in the Middle East
Non-fungible tokens have shot their way into popularity. No doubt, they are poised to stay there. Metaverse and million-dollar sales in tokenized art have suddenly emerged. Hence, the phenomenon is set for even more acceptance than it currently has. Yet, there are a few kinks to resolve. NFTs create a worry for regulators due to their potential to be used in money laundering and their environmental footprint.
This article will consider NFT regulations in the Middle East, focusing on particular countries and their laws:
NFT Regulations in the United Arab Emirates
The United Arab Emirates has a very friendly disposition to cryptocurrency. Its assortment of regulatory agencies has created various rules on digital assets. Furthermore, a 2021 release by the Prime Minister detailed the government’s plans to deepen its deployment of blockchain technology. In the face of hostile attitudes by China and the United States, UAE has also opened its doors to Binance, a leading cryptocurrency exchange platform. Both signed an agreement in 2021 on creating a virtual asset ecosystem in UAE. A further indication of Binance’s view of the UAE as a potential long-term partner is its plan to establish a headquarters in the country.
Nationally, the United Arab Emirates also possesses a liberal disposition to digital assets, particularly NFTs. A survey of 1000 UAE residents showed that 23% of respondents own at least one NFT. This figure is double the global average of 11.7%. In comparison, the United States, the UK, and Japan have some of the lowest rates of NFT adoption.
Crypto-related businesses are equally on the increase in the country as hundreds of companies seek licenses for their activities. A symbolic demonstration of UAE’s objective of becoming a blockchain capital is its distribution of NFT postal stamps on its National Day in 2021.
NFT Regulations in Bahrain
Like the United Arab Emirates, Bahrain is a receptive country to cryptocurrency. In December 2021, Binance obtained an approval-in-principle to operate as a crypto asset service provider in the country. The Institute of Banking and Finance in Bahrain has also launched an educational NFT. This act signals improved regulatory attitudes to cryptocurrency. Also noteworthy is the fact that succinct regulatory disposition towards digital assets has been in existence since 2019. The Central Bank of Bahrain had released guides on the operation of crypto-related businesses. Importantly, Bahrain has plans to become a financial technology hub. Therefore, it views cryptocurrency as an important way of realizing that.
NFT Regulations in Qatar
Qatar’s ban on Bitcoin in 2018 reflected a hardline outlook to regulation. However, laws in Qatar are not necessarily hostile to cryptocurrency. In 2021, the Qatar Financial Center Regulatory Agency instituted a ban preventing all crypto transactions in its jurisdiction until further notice. It is important to note that this restriction exempts security tokens regulated by the QFCRA and other authorities. The Agency also stated that any such transaction would attract a penalty.
In conclusion, while the UAE and Bahrain feature among countries with regulatory friendliness to cryptocurrency, others in the Middle East approach them with lesser speed. From the above, we can infer that state policies on the economy and national security will influence their acceptance or otherwise of digital currencies.