Dubai, in a bid to drive crypto adoption, has now permitted charities to accept donations in cryptocurrencies. The development was approved by Dubai’s Islamic Affairs and Charitable Activities Department (IACAD) last week.
Dubai is among the first locations in the world that had established a dedicated body to oversee crypto developments back in 2022. In the last three years, the Emirate has emerged as a hotspot for crypto activities regulated by its Virtual Assets Regulatory Authority (VARA).
IACAD, in its statement said that the department’s general policy allows it to facilitate fundraisers via virtual assets. Explaining the reason, the agency said that donations sent via crypto would leave permanent records on the blockchain– ensuring a transparent proof of use and transfers.
“We are keen to ensure the highest levels of governance and transparency through clear policies and precise regulatory procedures that protect donors and support the sustainability of humanitarian work,” said Mohammed Musbeh Dhaahi, Executive Director of IACAD’s Charitable Work Sector.
Those charities looking to utilize the access to crypto donations have been directed to apply with the IACAD for preliminary authorization.
The new service will enhance the readiness of the charitable sector to receive donations through diverse means that meet donors’ needs and further strengthen Dubai’s position as a global hub for innovation in humanitarian work,” the announcement statement noted.
Whether crypto should become a mode of donations and charity has emerged as a debatable subject in recent years. Cryptocurrencies have the capability of facilitating private, peer-to-peer transactions. While the transaction trail is transparently and immutably stored on the blockchain – tracing the transactions is not always easy and possible which is why the chances of fund exploitation or money laundering is not taken lightly by the authorities.
Just in October this year, U.K.’s Cabinet Office minister Pat McFadden called for a ban on crypto donations for electoral support and political campaigns. McFadden, supporting his opinion, had said that it is critical for governments to identify the sources of political and verify the compliant statuses of the donating entities.
Back in 2023, a crypto relief aid was set up in Israel to manage the war-caused crisis. Finland has also planned to donate a “tens of millions” of euros via BTC confiscated from criminal investigations.