The UAE regulators are paving the way for the adoption of crypto and blockchain, says legal expert

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While many countries tend to simply ban the use of Bitcoin (BTC) and virtual assets, regulators in the United Arab Emirates are taking a different approach.

The country has consistently implemented its vision of becoming a blockchain capital by providing framework conditions that support crypto companies to operate in compliance with the law.

The country’s jurisdictions are divided into the mainland, where the regulator is the Securities and Commodities Authority (SCA), and free zones, which are geographically defined areas within the UAE with relaxed tax and regulatory systems.

These free zones include the Dubai International Financial Center (DIFC), which is regulated by the Dubai Financial Services Authority (DFSA), Abu Dhabi Global Markets (ADGM), which is regulated by the Financial Services Regulatory Authority (FSRA), and the Dubai Multi Commodities Center (DMCC), which is regulated by the SCA.

In an interview with Cointelegraph, Kokila Alagh, founder and CEO of Karm Legal Consultants, gave a brief overview of the regulatory situation in the country. According to Alagh, SCA, the mainland regulator, provides security and opportunity for crypto and blockchain companies:

“The regulations have added security and opened up new opportunities in the UAE, making SCA a progressive regulator in the global landscape as it has not ignored this important growth sector and is continuously working to develop the framework to adapt to these emerging sectors . “Like DLT, blockchain.”

The FSRA, ADGM’s financial services regulator, was the first to introduce digital asset regulations in the country back in 2018. Alagh said the ADGM was also one of the first regulators in the world to introduce digital securities regulations and guidelines for virtual assets, adding that ADGM is “one of the top jurisdictions for established blockchain companies.”

Alagh also discussed regulations in the DIFC. According to Alagh, the DFSA, the regulator of the DIFC, is “one of the first regulators from a large finance-free zone to introduce regulations regarding security tokens.”

The current DFSA regulations cover the tokenization of securities through blockchain and distributed ledger technology, including the tokenization of stocks, derivatives, bonds, bonds, certificates or fund shares. However, consultation papers for stablecoins, fungible cryptos and non-fungible tokens are still being drawn up.

Related: Dubai World Trade Center builds new crypto hub and becomes regulator

Eventually, Alagh noticed DMCC. The free zone has issued special licenses such as the DLT technology service provider license and the license for proprietary trading in crypto raw materials. It also has a crypto center called Crypto Oasis, which is where more than 130 blockchain companies have registered.

Alagh said that “DMCC is one of the most advanced regulators in the field and has spearheaded the development of the UAE’s crypto ecosystem. The DMCC is a crypto-friendly regulator and offers companies a friendly setting up a business. ”

Meanwhile, the crypto exchange Binance has set out to work with the UAE government to help crypto exchanges and companies get their licenses in Dubai. The company signed a letter of intent with the Dubai World Trade Center Authority when they launched a crypto hub.


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