• The Virtual Asset Regulatory Authority (VARA) recently released guidelines for virtual asset service providers (VASPs) in Dubai, United Arab Emirates, which included a ban on privacy coins.
• Several players within Dubai and a privacy protocol project commented on the updated guidance on crypto in Dubai.
• Market participants believe that money, whether physical or digital, does require some degree of traceability and this is why crypto payments companies implement Know Your Customer and Anti-Money Laundering measures.
Ban on Privacy Coins in Dubai
The Virtual Asset Regulatory Authority (VARA) recently provided the much-awaited guidelines for virtual asset service providers (VASPs) in Dubai, United Arab Emirates, which included a ban on privacy coins. On Feb. 7, VARA released several rulebooks for VASPs including the “Virtual Assets and Related Activities Regulations 2023” in which VARA mentioned a prohibition on privacy coins.
Effects of the Ban
Khaled Moharem, president of the Middle East at blockchain-based payments ecosystem WadzPay told Cointelegraph that while more time is needed to fully assess the implications of the new development, their initial assessment shows that issuance will be banned. He explained that money does require some degree of traceability and this is why their crypto payments company implements Know Your Customer and Anti-Money Laundering measures to ensure funds are not used for illicit purposes.
Reactions from Crypto Projects
Christopher Goes, co-founder of privacy protocol Anoma pointed out that privacy is a basic human right and a ban demonstrates a lack of consideration for the public.
Opinions from Market Participants
Market participants believe that issuance will be banned as money does require some degree of traceability to avoid being used for illicit purposes. Furthermore they think it is necessary to implement Know Your Customer and Anti-Money Laundering measures to ensure funds are not used for illegal activities.
Conclusion
The news regarding the ban on privacy coin issuance did not come as a surprise since other regions have made similar indications before. While further analysis needs to be done to understand all potential implications, market participants believe it’s necessary to take certain measures such as KYC/AML procedures in order ensure funds are not used for illegal activities