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Dubai bans privacy cryptocurrencies
Dubai’s financial regulator has banned the use of privacy cryptocurrencies, including Monero and Zcash. As of January 12, new rules governing digital assets came into force in the emirate’s international financial zone, the Dubai International Financial Centre (DIFC), CoinDesk reported. Under the new framework, the ban applies to trading, promotion, and transactions involving derivative financial instruments both within and outside the DIFC.
“Most anti–money laundering and financial crime requirements are not met when privacy cryptocurrencies are used,” said Elizabeth Wallace, Deputy Director of Legal Affairs at the Dubai Financial Services Authority (DFSA).
At the same time, the DFSA revised its approach to the definition of stablecoins. They are now understood to be tokens pegged to fiat currencies and backed by liquid assets capable of meeting demand during periods of instability. Algorithmic stablecoins do not fall under this definition, although they are not explicitly banned from circulation.
Algorithmic stablecoins, in turn, are defined as decentralized stablecoins whose price stability is maintained through algorithms rather than assets or collateral. No fiat or crypto assets are used to support their price. Instead, smart contracts and mathematical algorithms serve as the backing, with the supply of such coins automatically adjusted based on existing demand.
In addition, companies operating within the DIFC will now be responsible for assessing and approving crypto assets themselves. They will no longer need to obtain prior approval from the regulator, which also will not publish a list of approved tokens.
See also: "Losses from cryptocurrency thefts reach a record $4 billion"
