The Virtual Assets Regulatory Authority (VARA) in Dubai has banned all activity involving privacy coins such as Monero (XMR) and Zcash (ZEC). According to recent documents, the regulator has also imposed certain rules on the domestic cryptocurrency industry in a bid to transform the city into an “international virtual asset hub.”
The most fundamental principles include anti-money laundering obligations, marketing protocols, protection against insider trading and monitoring whether an asset class is being used for criminal activity. Angela Ang, senior policy advisor at blockchain intelligence agency TRM Labs, commented:
“Any obfuscation of fund flows poses a challenge to detecting illicit activities, so it is unsurprising that regulators react strongly to these kinds of asset classes and mechanisms.”
Dubai has been making plans to make crypto widely adopted and safe for its citizens. The updated system aims to provide maximum security for local consumers and establish Dubai as a global blockchain technology hub. The regulator had previously granted temporary licenses to Binance and Crypto.com to offer services in the region while allowing FTX to set up a regional headquarters.
The largest airline in the United Arab Emirates – Emirates Airline – has also announced its intention to accept bitcoin as payment and use blockchain technology to track aircraft records.
Another example of Dubai’s pro-cryptocurrency stance is the luxury five-star hotel Palazzo Versace Dubai. It allows customers to pay for accommodation, spa services and meals in digital currency. Supported assets are Bitcoin (BTC), Ether (ETH) and Binance Coin (BNB).
Dubai Joins the List of Organizations Banning Privacy Coins
Japanese authorities banned privacy coins like Monero (XMR), Zcash (ZEC), and Dash (DASH) in 2018 over fears criminals would use them for their illicit operations.
Some leading exchanges have also delisted these assets from their platforms. Bittrex did so in early 2021 without giving any particular reason. Huobi Global suspended trading in seven privacy coins (including XMR and ZEC) in September 2022 “in accordance with the latest financial regulations.”
