February 26, 2024

UAE free zone to explore Bitcoin payments for services, lawyer says

Ras Al Khaimah’s recently announced free zone for virtual asset firms will explore accepting crypto payments from companies looking into setting up their businesses in the emirate, a lawyer involved in the hub’s development said.

Dubai-based crypto lawyer Irina Heaver told Cointelegraph that once the Ras Al Khaimah Digital Assets Oasis (RAK DAO) secures the appropriate partners, it will check out crypto payments, including Bitcoin (BTC) and stablecoins, for corporate registrations, office rent and other services. “After all, cities and cantons in Switzerland have been doing this for years,” she noted.

Heaver further explained that suitable technology and regulatory infrastructure need to be in place for the system to work but clarified that the “groundwork has been laid.” In addition, the lawyer also said that RAK DAO would explore operating full Bitcoin and lightning nodes to support the crypto payment initiative. She added:

“Works are ongoing in this regard, and we welcome technology partners to join us in this journey.”

RAK DAO — first unveiled during Blockchain Life 2023 — would be a dedicated free zone for digital and virtual assets service providers involved in the metaverse, blockchain, utility tokens, digital wallets, nonfungible tokens, decentralized autonomous organizations (DAOs), decentralized applications and other Web3-related businesses.

Heaver said that the new free zone aims to foster regulated and non-regulated activities, disclosing that RAK DAO is exploring “creating the right legal wrapper for DAOs,” among other things.

Related: UAE emirate to launch a free zone for digital and virtual asset firms

The new free zone will also serve the “entire chain of companies in the virtual assets space,” Heaver explained. “Whereas other free zones can only support segments of the industry, allowing very limited activities.” She added:

“I have to structure multiple entities in multiple jurisdictions. This adds to costs and time and is counterproductive for entrepreneurs. Now, I see a great opportunity for founders to base their businesses in one location.”

The United Arab Emirates has over 40 free zones, including the Dubai Multi Commodities Centre (DMCC) and Dubai International Financial Centre (DIFC).

As living and business costs in Ras Al Khaimah are 50% less than in Dubai, Heaver said the emirate’s free zone would be a “great point for startup companies.”

The government will also assist virtual asset service providers (VASPs) with banking requirements through its own entities and relationships, the lawyer said.