The Gulf Cooperation Council (GCC) countries will come up with a regulatory framework for cryptocurrencies “very soon”, a top official from banking group Emirates NBD said on Monday.

Online trading in virtual currencies has surged over the past 12 months, with the value of some of the main cryptocurrencies experiencing high levels of volatility on fears of a potential regulatory crackdown.

As yet, however, these currencies are mainly unregulated in most parts of the world.

Last week, Dubai Multi Commodities Centre announced it will start issuing licences to allow firms trading in cryptocommodities, including currencies, to operate from its free zone and the regulator of Abu Dhabi's international financial centre said it could create rules for cryptocurrency exchanges.

On Monday, Tariq Bin Hendi, executive vice president and acting chief investment officer of Emirates NBD, said he expected regulations for cryptocurrency trading to come out soon, but added that it will be hard to predict the exact timing of their releases. 

“I think regulators (globally) will put a framework in place very soon,” Bin Hendi said, speaking at Emirates NBD’s 2018 investment outlook event that was held in Dubai on Monday. “The GCC will have something very soon,” he added.

This month, several banks in the United States and United Kingdom announced plans to ban the use of credit cards to buy and sell cryptocurrencies after Bitcoin, the most valuable and popular cryptocurrency, fell to a three-month low on February 5. It has since rebounded in value, closing at $10,421 on the Luxembourg-based Bitsamp exchange on Sunday evening.

But according to Bin Hendi: “If it (cryptocurrency) was fraudulent and corrupt… it would have already been banned”.

“The very same people today, some of whom are Nobel Prize winners that are dismissing blockchain and crypto are the same people that dismissed the internet when it was founded in the nineties and thought it would be a utility that only a handful of people used,” Bin Hendi said.

“I am not going to say that they are necessarily incorrect today but they were definitely very wrong in the early nineties,” he added.

The founder and CEO of Dubai’s popular cryptocurrency exchange BitOasis, Ola Doudin, told Zawya in an interview last month that her company plans to work to help authorities in the United Arab Emirates (UAE) this year set regulations for trading in digital currencies.

For more on bitcoin and developments in cryptocurrencies, see Zawya’s Special Coverage.

(Reporting by Yasmine Saleh; Editing by Michael Fahy)

(Yasmine.saleh@thomsonreuters.com)

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© ZAWYA 2018