- The UAE Central Bank issues rigorous AML/CFT guidance for licensed financial institutions.
- New rules to mitigate risks from virtual assets and their service providers.
- Detailed due diligence process to aid financial institutions in managing potential crypto-related risks.
The Central Bank of the United Arab Emirates (CBUAE) has enacted revolutionary guidance to fortify the country’s stand against money laundering and terrorism financing (AML/CFT). This guidance addresses Licensed Financial Institutions (LFIs) including, but not limited to, banks, finance companies, and exchange houses. The goal is to bolster their understanding of the prevalent risks and boost the effective execution of their statutory AML/CFT obligations.
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Recognizing the potential threats stemming from virtual assets (VAs) and virtual asset service providers (VASPs), this directive lays out concise definitions and descriptions of VAs, VASPs, and VASP business models. Further, it sheds light on various channels and mechanisms that govern the interaction between LFIs and VASPs.
Notably, this guidance will be implemented within a month, taking into consideration the standards set by the Financial Action Task Force (FATF). It also sets the course for LFIs to undertake comprehensive customer due diligence (CDD) and enhanced due diligence (EDD) for potential VASP customers and counterparts. The ultimate goal is to offer LFIs extensive support through training programs, a strong governance system, and robust recordkeeping mechanisms, all while mitigating risks.
On Crypto Future in UAE
The UAE, through its proactive measures, demonstrates a promising outlook for the future of cryptocurrency in the region. With a clear vision to harness the potential of digital assets while ensuring the highest degree of financial integrity and security, the country is paving the way for a robust and secure crypto infrastructure. These developments are set to drive innovation and foster confidence, propelling UAE’s stride towards becoming a global crypto powerhouse.
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