2024: A Transformative Year for Global Crypto Regulation
As we bid farewell to 2024, it is clear that this year has been a landmark period in the evolution of global crypto regulation. Policymakers around the world have been working tirelessly to create comprehensive rules and frameworks to govern the rapidly growing crypto industry.
A New Era of Mainstream Finance
With the increasing adoption of crypto assets by mainstream finance, regulators are stepping up their efforts to ensure that these new financial instruments are subject to robust oversight. This shift towards greater regulation is a welcome development for investors, who can now have greater confidence in the stability and security of the crypto market.
United States: A Strategic Bitcoin Reserve
One of the most significant developments of 2024 has been the announcement by President-elect Donald Trump of plans to establish a strategic Bitcoin reserve in the United States. This move has sent shockwaves through the global financial community, with many interpreting it as a sign that top-tier governments are now considering Bitcoin and other crypto assets as strategic holdings rather than fringe experiments.
European Union: MiCA Regulation
Across the Atlantic, the European Union’s Markets in Crypto-Assets (MiCA) regulation has been making waves. This comprehensive framework requires crypto exchanges to over-comply with regulatory requirements, leading some to delist non-compliant stablecoins ahead of regulatory deadlines. While this may have caused short-term disruptions, it is clear that MiCA is a major step forward for the EU’s efforts to regulate the crypto sector.
United Arab Emirates: A Regulatory Haven
The United Arab Emirates (UAE) has been another country at the forefront of crypto regulation in 2024. With five regulators now overseeing virtual asset service providers (VASPs), the UAE has introduced a series of laws, licensing frameworks, and tax exemptions that have made it an attractive destination for businesses looking to establish themselves in the region.
Regulatory Landscape in the UAE
The UAE’s regulatory landscape is complex, with multiple bodies shaping the country’s crypto sector. However, this complexity can also be seen as a strength, offering companies the flexibility to navigate different regulatory environments and find the best fit for their business model.
Key Developments in the UAE
One of the highlights of 2024 was the introduction of the Payment Token Services Regulation via Circular No. 2/2024 by the Central Bank of the UAE (CBUAE). This regulation governs the issuance of stablecoins, while also providing a framework for businesses to operate in the country.
Another significant development has been the introduction of a regulatory framework specifically for stablecoins by the Abu Dhabi Global Market (ADGM). Under these rules, issuers must fully back their tokens with reserves, maintain strong governance, and ensure rigorous transparency.
Tax Exemptions
The Federal Tax Authority has also provided tax relief to cryptocurrency transactions, exempting them from value-added tax (VAT) from November 15, 2024. While this may seem like a welcome development for traders, it is essential to note that this exemption only applies to transactions conducted within the UAE and does not affect VAT obligations in other countries.
New Entrants and Expansions
The regulatory clarity provided by the UAE’s framework has attracted significant market players to the region. Heavyweights such as Binance, Crypto.com, OKX, and Bybit have received VASP licenses, expanding their services from exchange and lending to derivatives trading.
Other prominent companies like Ripple, Blockdaemon, Circle, Paxos, eToro, and Tether have also made significant expansions or relocations within the UAE. The DMCC Crypto Center in Dubai has welcomed many new entrants who have relocated their headquarters to the region’s most active crypto ecosystem.
A Future of Greater Regulation
As we look ahead to 2025, it is clear that the trend towards greater regulation will continue. In the US, the incoming Bitcoin strategic reserve will be closely watched, while in Europe, MiCA may lead to further tightening of regulatory requirements.
Within the UAE, the regulatory framework is expected to become even more granular, with a focus on token issuance, stablecoins, and decentralized finance platforms. Despite these tighter regulations, the UAE is likely to attract even more global players seeking to establish themselves in the region.
Conclusion
2024 has been a transformative year for global crypto regulation, marked by significant developments in the US, EU, and UAE. As we bid farewell to this year, it is clear that 2025 will be shaped by an increasingly complex regulatory landscape. Businesses must therefore "lawyer up" and prepare themselves for a future of greater oversight and compliance.
About the Author
Irina Heaver is a leading Bitcoin and crypto lawyer based in the UAE and Switzerland, recognized globally for her extensive experience and technical expertise. She holds a Juris Doctorate from Monash University and a Master of Laws degree in International Taxation and Energy Laws from Melbourne University, with advanced specializations in AI and blockchain technologies.
Disclaimer
This article is for general information purposes only and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
