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UAE: Track crypto transfers to help fight money-laundering, Central Bank tells providers

The UAE and other central banks around the world have been tightening regulations around virtual assets due to their use for illicit trade

The UAE has asked virtual assets service providers to track and monitor cryptocurrency transactions and assets transfer as part of its efforts in anti-money laundering and combating the financing of terrorism, a senior official of UAE Central Bank said.

To regulate emerging technologies, such as payments using virtual currencies, the Central Bank has issued guidelines to the financial sector on the risks associated with virtual assets, said Fatma Aljabri, assistant governor for financial crime, market conduct and consumer protection at the National Anti-Money Laundering Committee at the Central Bank of UAE.

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“The Central Bank has imposed requirements on virtual assets service providers in the UAE regarding the ‘Crypto Asset Transfer’ rule, given its significant impact on many aspects of how crypto asset service providers operate in the UAE."

"These requirements allow tracking and monitoring of virtual asset transactions to detect activities related to money laundering or terrorism financing, and work towards combating them,” she said while delivering a speech on the first day of the two-day National Summit on Financial Crime Compliance.

The adoption of cryptocurrency and other virtual assets has been growing massively in UAE, Mena region and globally. The UAE and other central banks around the world have been tightening regulations around virtual assets, especially those related to cryptocurrency, due to their use for illicit trade, money laundering and financing of terrorism. As of October 9, 2024, the global crypto market size was $2.1 trillion (Dh7.7 trillion), according to coinmarketcap.

“As we look to the future with great optimism, we derive our steps from a strategic vision aimed at being amongst the best central banks in the world, in promoting financial stability. The new national strategy for combating money laundering, terrorism financing and proliferation financing for the years 2024-2027 aims to strengthen the UAE’s position as an international financial centre and a leading commercial destination,” said Aljabri.

While speaking during the National Summit on Financial Crime Compliance, UAE and foreign officials stressed that public-private partnership, sharing data, improving capacity building, intelligence sharing and KYC (Know your client) are vital aspects of dealing with this new technology challenges for countries around the world.

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