UAE Continues to Embrace Blockchain and Digital Assets with New Free Zone in Ras Al Khaimah

The United Arab Emirates (UAE) continues to establish itself as a global blockchain and digital assets center with the launch of a new free zone in Ras Al Khaimah (RAK).

The RAK Digital Assets Oasis will start accepting applications in the second quarter of 2023. The Oasis will consist of a purpose-built free zone for non-regulated activities in the virtual assets sector. It will primarily support emerging sectors of the crypto space, including blockchain, the metaverse, DAOs (Distributed Autonomous Organisations), NFTs and dApp development.

Free zones, also known as free-trade zones, offer businesses the opportunity to avail of favorable tax treatment while retaining 100% ownership. The development of free zones for innovative and forward-looking industries, such as digital assets and blockchain, has been one of the UAE’s strategies to attract more entrepreneurs and businesses. In doing so, the UAE aims to grow the non-oil sector of its economy.

The Dubai Chamber of Digital Economy estimates that the UAE’s digital economy is will grow from just under 38 billion to more than $140 billion in 2031.

Regulation of Crypto and Blockchain in the UAE

The UAE has also been working on establishing a regulatory framework for the digital asset industry to attract more entrepreneurs and investors to the country. In March 2022, Dubai implemented the Dubai Virtual Asset Regulation Law to create an advanced legal framework that safeguards investors and provides international standards for the governance of the virtual asset industry. The law also established the Virtual Asset Regulatory Authority (VARA) as an independent body responsible for regulating the digital asset sector in Dubai’s special development zones and free zones, excluding the Dubai International Financial Centre.

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Weekly Cryptocurrency Policy Roundup, January 29 2022

In September 2022, the Financial Services Regulatory Authority, which is responsible for regulating Abu Dhabi’s financial hub, The Abu Dhabi Global Market, published guiding principles to outline its approach to virtual asset regulation and supervision.

The UAE’s efforts to establish a regulatory framework for the digital asset industry demonstrate its commitment to creating a supportive environment for blockchain and crypto-related entrepreneurs and businesses.