In a new statement, the Central Bank of the United Arab Emirates has clarified its stance on the prohibition on virtual currencies.

Last month, the central bank published “Regulatory Framework For Stored Values and Electronic Payment Systems”, effective 01 January 2017, which said:

“All Virtual Currencies (and any transactions thereof) are prohibited”

However, in a recent statement sent to Gulf News, central bank governor Mubarak Al Mansouri said that the regulations do not apply to virtual currencies such as bitcoin. Al Mansouri wrote:

"These regulations do not cover 'virtual currency' which is defined as any type of digital unit used as a medium of exchange, unit account, or a form of stored value. In this context, these regulations do not apply to bitcoin or other crypto - currencies, currency exchanges, or underlying technology such as blockchain."

Al Mansouri said that the regulatory framework aims to facilitate robust adoption of digital payments across the UAE, while ensuring highest levels of consumer protection and financial stability. He added that the central bank is keeping an eye on the digital currency sector and new rules could be formulated in the future.

"This area is currently under review by the Central Bank and new regulations will be issued as appropriate," he added.