Dubai Financial Guardian to Release Consultation Papers for Crypto Regulatory Framework – Bitcoin News Regulation

The Dubai Financial Services Authority (DFSA) has revealed its plans to create a regulatory framework for cryptocurrencies. The announcement was part of its 2021-2022 business agenda released this week.

The Papers will be released in the First Half of 2021

According to the watchdog, which regulates the Dubai International Financial Center (DIFC), the forthcoming crypto framework aims to expand on the existing rules. It includes regulating crypto issuers and trading platforms.

The document, signed by DFSA Chairman Saeb Eigner, reads:

We will build on recent achievements in this space over the business planning period by developing a regulatory regime for digital assets (such as symbolic securities and crypto currencies), having already implemented regulations that support diverse innovative business models.

The financial watchdog explains that expanding such crypto regulation is part of the digital transformation of the UAE’s National Innovation Strategy.

The regulator also added that the regulatory approach is expected to facilitate innovation “while the DFSA’s licensing, prudential and conduct requirements need to be strictly adhered to.”

Per The National, a local media outlet, the DFSA expects to publish two consultation papers with the purpose of gathering feedback. As a result, the watchdog will release both documents in the first half of 2021. The 2021-2022 business plan states:

DFSA is committed to staying ‘open to business’ in relation to innovation in the financial services sector and is continuing to explore how our regulatory regime can accommodate new and innovative business models.

DFSA’s Current Perspective on Cryptocurrencies

In 2017, the DFSA referred to the crypto industry in the statement entitled “General Investor Statement on Cryptocurrencies.” At the time, the authority was vocal in its cautious stance on cryptos, considering elements such as initial coin offerings (ICOs) “high risk investments.”

The watchdog wrote in its 2017 statement:

Accordingly, before engaging with any persons promoting such offerings at the DIFC, or making any financial contribution towards such offerings, the DFSA urges potential investors to exercise caution and undertake with due diligence to understand the risks involved.

However, Dubai authorities have been issuing licenses through the Dubai Freight Center (DMCC) to companies trading cryptocurrencies since 2017. DMCC Free Zone is the largest and fastest growing free economic zone in the United Arab Emirates.

What do you think of Dubai’s upcoming crypto regulation? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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