Dubai poised to be a crypto hub, regulation expected by 2022

By Raffaele Redi

Financial Services Authority expects to cover cryptocurrencies by the end of 2021

Dubai skyline                                 
Dubai recently launched the DMCC Crypto Centre – Photo: Shutterstock
                                

The Dubai Financial Services Authority (DFSA) has launched its regulatory framework for Investment Tokens, and said that it expects to cover cryptocurrencies and stablecoins by the end of 2021.

The framework forms the first phase of the DFSA’s proposed Digital Assets regime, defining an Investment Token as either a Security Token or a Derivative Token.

The DFSA said it is now drawing up proposals, intending to issue a second consultation paper later in Q4, for tokens not covered by the Investment Tokens regulatory framework such as cryptocurrencies, defined as exchange tokens, utility tokens, and asset-backed tokens such as stablecoins.

Peter Smith, the DFSA’s managing director and head of strategy, policy and risk, said: “Creating an ecosystem for innovative firms to thrive in the United Arab Emirates (UAE) is a key priority for both the UAE and Dubai governments, and the DFSA”.

“Our consultation on Investment Tokens enabled us to understand what firms were looking for in a regulatory framework and introduce a regime that is relevant to the market. We look forward to receiving applications from interested firms and contributing to the on-going growth of future-focused financial services in the DIFC,” he added.

DMCC Crypto Centre

The United Arab Emirates is embracing blockchain technology as a force for business, with Dubai seemingly poised to emerge as a global hotspot and leader for blockchain applications in the future.

The Dubai Multi Commodity Centre, a Free Zone and government of Dubai authority on commodities trade and enterprise, recently announced the launch of the DMCC Crypto Centre, a comprehensive ecosystem for businesses operating in the cryptographic and blockchain sectors.

“Located in the state-of-the-art Almas Tower, the DMCC Crypto Centre is set to be a hub for the development and application of crypto and blockchain technologies. The Centre offers a home to all types and sizes of crypto businesses, from companies developing blockchain-enabled trading platforms to firms offering, issuing, listing, and trading crypto assets,” said the DMCC.

“The DMCC Crypto Centre will also house a leading crypto advisory practice led by CV Labs, the entity behind the Switzerland government-backed Crypto Valley,” DMCC added.

Blockchain Strategy 2021

The DMCC Crypto Centre recently unveiled its Blockchain Strategy 2021, aiming to host up to 50% of all government transactions on a blockchain platform to “cement the UAE’s status as one of the world’s most advanced economies and underline its preparedness to adapt to and grow alongside future technologies”.

Zap founder Nick Spanos, an early pioneer of blockchain technology, said: “There is a lot of hope in Dubai for bitcoin and blockchain enterprises because the government seems to be working with the industry. I believe that if they keep going the way they’re going, the Emirates can become the next Wall Street.”

Further reading: Cricket NFT platform Rario partners with Abu Dhabi T10

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