As the popularity of digital currencies continues to rise, many businesses are considering accepting cryptocurrencies as a form of payment. However, the regulatory landscape in the UAE is specific and requires careful understanding. So, is it legal for Merchants in the UAE to accept cryptocurrency as a payment?
According to the UAE Payment Token Services Regulation, there are stringent guidelines regarding the acceptance of cryptocurrencies (Virtual Assets) for transactions within the UAE. Here’s what Merchants need to know:
No natural or juridical person selling goods or services in the UAE may accept cryptocurrencies (Virtual Assets) towards payment for that sale unless it conforms to the following criteria:
- Local Cryptocurrencies:The Virtual Asset being used as a means of payment must be a Payment Token denominated in Dirham (AED) or referenced to another Payment Token valued in Dirham, and it must be issued by a Payment Token Issuer licensed by the UAE Central Bank.
- Foreign Cryptocurrencies: The Virtual Asset being used as a means of payment for the purchase of another Virtual Asset or Virtual Asset derivative must be a Payment Token issued by a Foreign Payment Token Issuer registered with the UAE Central Bank.
A Payment Token is defined as a type of Virtual Asset that can serve as, or is promoted to be, a store of value, medium of exchange, and unit of account.
in summary
in summary
It is only legal for merchants in the UAE to accept local UAE cryptocurrencies (Dirham Payment Tokens) issued by Payment Token Issuers licensed by the UAE Central Bank.
Cryptocurrencies issued by a foreign issuer can only be used if the issuer is registered with the UAE Central Bank and if the tokens are used for the purchase of other Virtual Assets or their derivatives.
Merchants must ensure they are fully compliant with these regulations to legally accept cryptocurrencies as payment. This legal framework is designed to maintain financial stability and consumer protection in the rapidly evolving digital currency market.
