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Article 2: Prohibitions on Activities and Promotions

2/2024 Issued on 14/6/2024

Restrictions on activities

1.No Person shall perform any Payment Token Service within the UAE or directed to Persons in the UAE, unless such Person is Licensed or Registered by the Central Bank to perform such Payment Token Service.
2.

No Person shall perform any service, within the UAE or directed to Persons in the UAE, where that service:

a)is performed with respect to any Means of Payment that is not a Payment Token; and
b)is a service that is similar or equivalent to a Payment Token Service.

This prohibition shall apply to all Persons, including any Person acting in the course of performing Virtual Asset activities for which it is licensed or regulated by SCA or a Local Licensing Authority.

3.No Person shall, within the UAE or directed to Persons in the UAE, issue Algorithmic Stablecoins or Privacy Tokens or perform services relating to Algorithmic Stablecoins or Privacy Tokens. This prohibition shall apply to all Persons, including any Person acting in the course of performing Virtual Asset activities for which it is licensed or regulated by SCA or a Local Licensing Authority.
4.

A Licensee or Registree must not knowingly initiate, facilitate, effect or direct a Payment Token Transfer as part of its Payment Token Service unless the transfer is of a:

a)Dirham Payment Token issued by a Licensed Payment Token Issuer being used for any lawful purpose; or
b)Foreign Payment Token issued by a Registered Foreign Payment Token Issuer being lawfully used (or sold for use) as a Means of Payment for purchase of Virtual Assets or derivatives of Virtual Assets.
5.A Foreign Payment Token Registree may only initiate, facilitate, effect or direct a Payment Token Transfer as part of its Payment Token Service in the UAE if the transfer is of a Foreign Payment Token being used (or sold for use) as a Means of Payment for purchase of Virtual Assets or derivatives of Virtual Assets.
6.A Licensed Payment Token Issuer may only issue Dirham Payment Tokens to Persons resident in the UAE. For the avoidance of doubt, aside from this Article (2)6 there shall be no restriction under this Regulation as to the territory in which a Payment Token may be used or to or from which it may be transferred.
7.

No Merchant or other Person in the UAE selling goods or services during the course of business may accept a Virtual Asset towards payment for that sale unless that Virtual Asset is:

a)a Dirham Payment Token issued by a Licensed Payment Token Issuer being used as a Means of Payment ; or
b)a Foreign Payment Token issued by a Registered Foreign Payment Token Issuer being used as a Means of Payment for purchase of a Virtual Asset or Virtual Asset derivative.
8.A Bank may not act as a Payment Token Issuer, but may, subject to the licensing and other requirements of this regulation, set up a subsidiary, affiliate or other related entity to perform this activity.

Restrictions on promotions

9.

No Person shall engage in any Promotion, within the UAE or directed to Persons in the UAE, where such Promotion relates to Payment Token Services unless such Person:

a)has a License or Registration to perform the activities which are the subject matter of the Promotion; or
b)is appointed by such a Licensee to engage in the Promotion on the Licensee’s behalf.
10.

No Person shall engage in any Promotion, within the UAE or directed to Persons in the UAE, where such Promotion is for services relating to any Means of Payment unless the Promotion solely relates to:

a)Dirham Payment Tokens issued by Licensed Payment Token Issuers being used for any lawful purpose; or
b)Foreign Payment Tokens issued by Registered Foreign Payment Token Issuers being lawfully used as a Means of Payment for purchase of a Virtual Asset or Virtual Asset derivative.

This prohibition shall apply to all Persons, including any Person engaging in Promotions relating to Virtual Asset activities for which it is licensed or regulated by SCA or a Local Licensing Authority.

11.No Person shall engage in a Promotion, within the UAE or directed to Persons in the UAE, where such Promotion is for the issuance of Algorithmic Stablecoins or Privacy Tokens or services relating to Algorithmic Stablecoins or Privacy Tokens. This prohibition shall apply to all Persons, including any Person engaging in Promotions relating to Virtual Asset activities for which it is licensed or regulated by SCA or a Local Licensing Authority.
12.The Central Bank may require any Person to provide a reasonable level of evidence to demonstrate that such Person is not performing an activity in breach of this Article (2). The Central Bank may request such evidence on a single occasion or may require regular reporting (in such form as the Central Bank may specify from time to time) of such evidence by any Person.
13.For the avoidance of doubt, reference to ‘the UAE’ in this Article (2) excludes the jurisdiction of the Financial Free Zones.