The UAE Central Bank has issued new AML/CFT guidelines covering transactions with virtual assets, including cryptocurrencies and non-fungible tokens (NFTs).
The new guideline, which will come into force within a month, will be applied to all licensed financial institutions, including banks, finance companies, exchange centers, payment service providers, registered hawala service providers, insurance companies, agents and brokers.
The guide discusses the risks while dealing with virtual assets and virtual asset service providers and indicates the effective implementation of the legal obligations of licensed financial firms. In addition, they provide clear definitions of virtual assets, virtual asset service providers, and their business models.
Furthermore, the guide outlines the due diligence procedures that financial institutions are required to follow when dealing with customers of virtual asset service providers. Moreover, they highlighted the appropriate channels and mechanisms through which financial institutions should interact with virtual asset service providers.
Khalid Muhammad Balama, Governor of the UAE Bank, said that the new directives related to the virtual assets sector contribute to strengthening the supervisory and regulatory frameworks of the Central Bank to combat money laundering and terrorist financing.
Progressive rules about virtual assets
The UAE is one of the developed countries that regulate the digital asset industry. Dubai, one of the seven emirates, has formed a regulatory body dedicated to overseeing the virtual asset industry. Last month, the Abu Dhabi-based Federal Securities and Commodities Authority began accepting license applications for cryptocurrency services.
Moreover, the central bank indicated that the new directives are considered to be the standards of the Financial Action Task Force (FATF). In March of last year, the FATF added the UAE to its “gray” list, essentially increasing jurisdictional oversight. At the time, the UAE said it would work with the Financial Action Task Force to address those concerns.
“We are constantly working to strengthen efforts and enhance the awareness of licensed financial institutions to prevent all types of financial crime activities, and reduce potential risks to protect the financial and monetary system and maintain its integrity and stability, in line with the task of financial procedures and strength standards,” the governor added.
The UAE Central Bank has issued new AML/CFT guidelines covering transactions with virtual assets, including cryptocurrencies and non-fungible tokens (NFTs).
The new guideline, which will come into force within a month, will be applied to all licensed financial institutions, including banks, finance companies, exchange centers, payment service providers, registered hawala service providers, insurance companies, agents and brokers.
The guide discusses the risks while dealing with virtual assets and virtual asset service providers and indicates the effective implementation of the legal obligations of licensed financial firms. In addition, they provide clear definitions of virtual assets, virtual asset service providers, and their business models.
Furthermore, the guide outlines the due diligence procedures that financial institutions are required to follow when dealing with customers of virtual asset service providers. Moreover, they highlighted the appropriate channels and mechanisms through which financial institutions should interact with virtual asset service providers.
Khalid Muhammad Balama, Governor of the UAE Bank, said that the new directives related to the virtual assets sector contribute to strengthening the supervisory and regulatory frameworks of the Central Bank to combat money laundering and terrorist financing.
Progressive rules about virtual assets
The UAE is one of the developed countries that regulate the digital asset industry. Dubai, one of the seven emirates, has formed a regulatory body dedicated to overseeing the virtual asset industry. Last month, the Abu Dhabi-based Federal Securities and Commodities Authority began accepting license applications for cryptocurrency services.
Moreover, the central bank indicated that the new directives are considered to be the standards of the Financial Action Task Force (FATF). In March of last year, the FATF added the UAE to its “gray” list, essentially increasing jurisdictional oversight. At the time, the UAE said it would work with the Financial Action Task Force to address those concerns.
“We are constantly working to strengthen efforts and enhance the awareness of licensed financial institutions to prevent all types of financial crime activities, and reduce potential risks to protect the financial and monetary system and maintain its integrity and stability, in line with the task of financial procedures and strength standards,” the governor added.