Dubai – the capital of the United Arab Emirates in the Middle East – has unveiled a new digital currency law that apparently a lot of other countries could learn from. The law allows for increased innovation and investor protection in the space while also permitting banks to do their jobs in making sure that all crypto activity is regulated and safe.
Dubai Is Instilling a New Crypto Law
Jonathan Levin of Chainalysis fame is speaking at this week’s World Government Summit in Dubai. In a recent interview, he commented:
There’s lots of environments and conversations happening internationally about creating a best-in-class approach to the asset class, and there’s really an opportunity for Dubai to take a lead in that. As [Dubai] goes into implementation and building the regulatory environment for crypto businesses to operate, it has the potential to become a model of how this regulation of the sector should be performed. It will allow for a much more tangible example that people can look to as a regulatory architecture for the industry… and get the balance right between economic growth, encouraging innovation behind the sector and protecting investors and public safety.
As of late, there are many countries out there getting heavily into the notion of regulating cryptocurrency. They are beginning to acknowledge just how big the space has become. They understand that many people are beginning to trade these assets and get involved regularly, and thus they want to make sure that they can instill the right laws to keep criminal activity within the industry to a minimum or eliminate it altogether.
Some countries are going to the extreme to make this happen. The United Kingdom, for example, has basically ruled that all crypto ATMs are now outlawed. In addition, any sort of crypto advertising is kept under strict scrutiny and is often dismissed for being too misleading or for promoting what the country feels are risky investments.
The United States is also getting into crypto regulation with a new executive order that called for government agencies to analyze crypto and their risks. This order also potentially ordered discussions surrounding a digital version of USD, the nation’s currency.
Despite all the concerns surrounding the crypto space, Chainalysis commented that illicit activity is not as strong as one might think. The blockchain analysis firm recently stated in a new report:
Given the roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency, but the fact that the increase in illicit transaction volume was just 79 percent, nearly an order of magnitude lower than overall adoption, might be the biggest surprise of all.
Illicit Activity Is Small by Comparison
Jonathan Levin added to this, stating:
With the growth of legitimate cryptocurrency usage far outpacing the growth of criminal usage, illicit activity’s share of cryptocurrency transaction volume has never been lower.
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