Cryptocurrencies have taken the center-stage yet again thanks to the present bull run. In the latest news, Dubai Financial Services Authority [DFSA] has announced its plans to introduce cryptocurrency regulatory frameworks as part of its business plan brochure for the years 2021 to 2022.
According to the company release, the regulatory watchdog is keen on enhancing the region’s cryptocurrency-related regulations with the upcoming framework to expand its regulation of digital asset issuers and associated trading platforms.
Dubai financial agency revealed that the cryptocurrency framework will essentially include a number of digital asset types like tokenized securities and cryptocurrencies like Bitcoin.
Peter Smith, who happens to be the head of strategy, policy, and risk at the Dubai Financial Services Authority, revealed that the financial regulatory agency of the special economic zone intends to regulate a wide range of digital assets, including security tokens, utility tokens, the various types of exchange [or payment] tokens, such as cryptocurrencies [and] the firms that provide relevant services in these markets.
Its official paper titled ‘DFSA Business Plan 21-2’ stated
“We will build upon recent achievements in this space over the business planning period through developing a regulatory regime for digital assets (such as tokenized securities and crypto-currencies), having already implemented regulations supporting various innovative business models. “
The plan further read,
“In doing so, we intend to take a regulatory approach that facilitates innovation while requiring strict adherence to the DFSA’s licensing, prudential and conduct requirements”
Dubai Financial Services Authority’ss business plan did not divulge any details about a potential timeline for introducing the regulations. However, Bryan Stirewalt noted that the regulatory watchdog would continue to pursue regulatory changes in this area in a bid to maintain the right balance between promoting innovation, while simultaneously protecting investors as well, through the development of a Digital Assets regime.
The DFSA license has slowly become quite popular among the financial services provider and several established players in the industry across the world have gained the license over the past couple of years for the purpose of managing their Middle East operations.
Cryptocurrency ecosystem in UAE
A quick primer: Prior to Dubai Financial Services Authority’s latest news, it was over two years ago that the UAE’s first cryptocurrency-focused rules emerged. The Financial Services Regulatory Authority [FSRA] of the Abu Dhabi Global Market released official guidance on cryptocurrencies, exchanges, and initial coin offerings [ICOs] back in June 2018. Following this stint, the FSRA continued to actively participate with the crypto ecosystem and even gave green light to many firms in the space.