Abu Dhabi’s Financial Services Regulatory Authority (FSRA) considers creating rules for virtual currency exchanges, Reuters reported.
FSRA will consult and work closely with industry participants and relevant professional bodies on the issue.
“The FSRA notes that virtual currencies, although not legal tender, are gaining interest globally as a medium of exchange for goods and services,” the regulator said.
The move can be seen as a sign that authorities in the United Arab Emirates may allow trade in cryptocurrencies to develop. Previously, regulators in the UAE had expressed scepticism about cryptocurrencies, without going as far as trying to enforce an outright ban on them.
Last September, the Dubai Financial Services Authority warned investors to be cautious about dealing in them because they were not regulated.
In October, the UAE central bank said it did not recognize Bitcoin (EXANTE: Bitcoin) as an official currency, citing the risk of it being used in money laundering and terrorist financing, and last week the UAE’s securities regulator warned the public about the risks of using digital tokens.
It was reported in December 2017 that the central banks of the United Arab Emirates and Saudi Arabia are reportedly launching a pilot initiative that will see the two institutions test a new cryptocurrency for cross-border payments.