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Bitcoin in the UAE: Live AED Price, Best Exchanges, Taxes, and History
Believe it or not, the Middle East has been embracing the cryptocurrency revolution. Not only have many governments been considering issuing their own state-backed stablecoins, but Bitcoin adoption is growing alongside a burgeoning blockchain industry. The United Arab Emirates (UAE) is thus far mixed on the issue, however. However, it is one of the first countries in the region to have outright guidelines on ICOs and various cryptocurrency-related services.
Although Bitcoin is in the murky territory in the UAE’s legal system, the country seems to be turning a page and opening itself up the idea. So, although it may be trick now, Bitcoin holders should wait a year or two for the state to ‘catch up’ to this expanding industry. Exchanges and blockchain-related companies are only starting to be licensed this year, so the industry is still very small in the country.
Is Bitcoin Legal in the UAE?
As of now, there is contradictory information on the legality of Bitcoin in the UAE. On the one hand, it was banned in January 2018 under article D.7.3 of the Regulatory Framework for Stored Values and an Electronic Payment System. Still, it seems that Bitcoin trading is available in the country. Regal RA DMCC recently became the first company in the Middle East to receive a license to trade cryptocurrencies. Multiple exchanges have also received licenses this year in the UAE, signaling a shift in how the government treats the industry.
Overall, it seems that the government sees promise in blockchain and we can likely expect complete legalization of the cryptocurrency sector in the coming years if this trend continues. Out of all the Middle Eastern nations, the UAE seems to be on track to be among the most ‘cryptocurrency-friendly.’
How to Buy and Sell Bitcoin in the UAE
Buying and selling Bitcoin in the UAE is possible, but few exchanges exist which are based in the country. This is not an issue though since most international exchanges offer services in the UAE regardless.
Top Bitcoin Exchanges in the UAE
Kraken remains one of the best options for UAE residents to trade cryptocurrencies. Supporting fiat deposits, the exchange boasts high liquidity. Based in the United States, it is currently the leading exchange by volume in euros and its services are available globally. It is relatively beginner-friendly.
Just keep in mind that you will need to convert the UAE dirham to euros or dollars to be able to trade on the exchange.
Bitstamp is noteworthy for being the first cryptocurrency exchange licensed in the European Union. Its services are available in UAE as well. Its most popular trading pair is EUR/BTC, but other fiat currencies are also supported. All that is required is a basic KYC check. With a longstanding history in the industry, it is considered among the best exchanges to buy BTC with fiat currency.
BC Bitcoin is a UK-based cryptocurrency broker. It prides itself on fast deposits and withdrawals, and generally, verification on the exchange only takes about an hour or so. It is yet another option for those looking to buy and sell Bitcoin in the UAE. It is probably the closest UAE residents can come to the ‘Coinbase experience.’
BitOasis is one of the few cryptocurrency exchanges which are licensed and fully operational within the UAE. Users can buy up to $1,350 of BTC weekly without any verification. Because of its unique position within the Middle East, BitOasis has become a popular trading hub for crypto-enthusiasts in the entire region. This is because countries like Saudi Arabia or Egypt, for example, still have no domestic cryptocurrency exchanges. The exchange was launched just this year but is worth signing up for.
If you are not interested in using a cryptocurrency exchange, you can also purchase BTC over-the-counter using LocalBitcoins. There are currently multiple sellers offering BTC in varying amounts on the marketplace. Just make sure you thoroughly check reputations before engaging in any trades on this platform.
Currently, there are no known Bitcoin ATMs anywhere in the UAE. This is because the commercial sector has not yet delved into cryptocurrencies. Given that exchanges have only begun to be licensed in the country, establishing ATMs in the country will likely take some time.
UAE’s Tax Rules on Bitcoin Profits
Because Bitcoin is in a legal grey area in the country, it is largely unaccounted for in the tax system. Thus far, there is no framework on which to pay taxes for cryptocurrency-related sales or transactions. So, holders have to decide for themselves what the best course of action is. The best suggestion would be to treat it as capital gains and pay your profits relative to the UAE’s regular laws on capital gains.
Consult the tax office for more information. We can likely expect more concrete tax laws on cryptocurrencies to be rolled out in the coming years as the industry becomes more popular in the UAE.
Where to Spend Bitcoin in the UAE
Because Bitcoin is in a legal grey area, there are no brick-and-mortar stores that accept the leading cryptocurrency in the UAE. The only option for spending your Bitcoin is online. Various vendors do accept Bitcoin like NewEgg and Overstock, but you will have to check the individual stores on whether or not they ship to the UAE.
Sadly, spending your BTC requires some jurisprudence and caution since many options are entangled in legal ambiguity. The commercial, everyday sector within the UAE has not yet embraced cryptocurrencies due to the legal ambiguities that still exist. Given that there is no defined tax standard for companies wishing to accept cryptocurrencies in the country, almost all have been hesitant to try it.
Therefore, if you wish to spend BTC like cash, it is advisable that you do it instead through international online vendors. It will take a few more years for the commercial sector in the UAE to ‘catch up’ to cryptocurrency payments.