TechFlow news, according to Cointelegraph, UAE blockchain lawyer Irina Heaver said the UAE's newly released regulations may ban cryptocurrency payments in the country. On June 5, the Central Bank of the UAE (CBUAE) board discussed projects under the country's Financial Infrastructure (FIT) initiative and approved the release of regulations on payment token services. The new guidelines recommend that payment tokens in the UAE must be backed by the dirham and cannot be pegged to other currencies.
Heaver pointed out that these new rules prohibit the use of cryptocurrencies for payments of goods and services unless they are licensed dirham payment tokens or registered foreign payment tokens—neither of which currently exist. She believes this contradicts the UAE’s long-standing pro-business and pro-investment stance and could negatively impact foreign investment inflows.
In addition, Heaver noted that Tether (USDT) has been a "pillar" of Web3 and crypto transactions, and the new regulations could hinder development in this space, damaging the UAE’s image and ambitions in the digital economy. She also emphasized that the UAE lacks an industry representative body like Switzerland’s Crypto Valley Association, leaving its Web3 and crypto sectors at a disadvantage when facing unfavorable policies.
