UAE regulators to lead in crypto, blockchain adoption

United Arab Emirate (UAE) becoming blockchain capital by providing legal frameworks to crypto businesses.

In order to become a blockchain hub in the Middle East region, the United Arab Emirate (UAE) has consistently enacted laws and frameworks for blockchain and crypto companies.

UAE consists of a federation of seven emirates, consisting of Abu Dhabi (where the federal capital, Abu Dhabi, is located), Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain. 

There are various authorities in the mainland and free zones based in the UAE that work as an authority that manages financial regulations. Securities and Commodities Authority (SCA) founded in 2000 looks after financial regulations of the mainland, while other authorities look after financial regulations of all free zones. 

This includes Dubai International Financial Centre (DIFC), regulated by the Dubai Financial Services Authority (DFSA), an independent regulator of financial services conducted in or from the DIFC, a purpose-built financial free zone in Dubai; Abu Dhabi Global Markets (ADGM), which is regulated by the Financial Services Regulatory Authority (FSRA); and the Dubai Multi Commodities Centre (DMCC), which falls under regulatory remit of the SCA provide the physical, market and financial infrastructure required to establish a hub for global commodities trade.

Dubai Financial Market (DFM) is also governed and regulated by the UAE Securities and Commodities Authority (SCA).

Speaking on this development, the CEO of a legal consultant said, SCA has become a progressive regulator and has been working on building new frameworks to adopt emerging sectors like distributed ledger technology (DLT) and blockchain. 

He also said that FSRA, ADGM was the first to introduce digital assets way back in 2018. They were first to introduce digital securities regulations and guidance on digital assets and to bring regulations regarding security tokens. 

Currently, DFSA regulations cover tokenization of securities through blockchain and DLT that include tokenization of shares, debentures, units of a fund, and debentures. 

They are also working on a draft for stable coins, cryptocurrencies, NFTs, the CEO added.

Crypto dedicated centre

Today, over 130 blockchain companies are registered at a crypto dedicated center called Crypto Oasis, which have received special licenses issued by UAE’s free zones. These companies are  DLT technology service providers and proprietary trading in crypto commodities. 

By doing so, the DMCC has become one of the most advanced regulators spearheading the development of the UAE’s crypto ecosystem and the most crypto-friendly regulator with a friendly framework for setting up businesses.

Dubai World Trade Centre to become regulator for virtual assets, crypto 

Dubai, one of the seven emirates under UAE, has announced on 20 December 2021 that Dubai World Trade Centre (DWTC) will become a comprehensive zone and regulator for virtual assets and crypto including digital assets, products, operators, and exchanges. 

DWTC in a statement said that it will collaborate with the private sector and entities for looking into the issues related to Anti Money Laundering (AML), Combating the Financing of Terrorism (CFT). It will also enforce rigorous standards for investor protection and compliance for cross-border financial deals. 

The trade center will further develop Dubai as a virtual market and create a framework for innovative financial products, adopting new trends that rely on advanced underlying blockchain technology, such as non-fungible tokens (NFTs) and cryptocurrencies. 

Becomes first nation to issues NFT stamps in the Middle East

To commemorate its 50th National Day, UAE became the first nation in the Middle East to issue non-fungible token (NFT) stamps. This move comes at a time when NFTs have gained more traction and acceptance across the world.

Emirates Post Group (EPG) said that it has also become the first postal organization in the Middle East and North Africa to issue digital collectible stamps. The NFT stamps consist of blockchain-based digital twins that will be sold as digital collectibles linked to their physical stamps.

Under this, four stamps each with a distinct design consisting of a national theme will be issued. EPG CEO while speaking on this said that the postal department will be launching more such stamps in the future.

Dubai finance watchdog approves listing of Bitcoin fund

On 21 October 2021, it was reported that Dubai Financial Services Authority (DFSA) has given approval to The Bitcoin Fund (QBTCu.TO), a closed-end investment vehicle-based in Canada.

The fund that made its debut on Nasdaq on 23 June 2021 became the first listed digital asset fund in the Middle East. It will also provide exposure to Bitcoin (BTC) and the daily price changes of Bitcoin in United States dollars, as well as long-term capital appreciation to investors. 

Dubai Airport Free Zone sign pact with SCA 

In May 2021, Dubai Airport Free Zone Authority (DAFZA) signed a new agreement with SCA that will now allow cryptocurrency trading under an established regulation. 

Under this agreement, SCA will oversee the offering, issuance, listing, and trading of crypto assets within the free zone. It will also handle all necessary approvals and licensing for companies regarding crypto trading.

According to DFSA Chief Executive Brian Stirewalt, Dubai aims to balance regulatory oversight and promote innovation in the digital asset space.

Looking at the developments happening in the last past months, UAE is set to become a hub for blockchain and crypto adoption in the coming months and to lead in the Middle East and Africa region. 

Rating: 5 Votes: 1

Your page rank:

Disclaimer: This article is for informational purposes only. The information does not constitute an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Klever.Finance does not provide financial, tax, legal, or accounting advice. There is no responsibility on the part of the company or the author for any loss or damage arising from or related to the use of or reliance on any content, goods or services mentioned in this article.

You might also like

klever news

Klever Weekly Newsletter – May 20

This was Travala’s special week where the Travala mini-app goes live in K5 and we hosted a Livestream with the Head of BD, Shane Sibley. Klever Exchange lists Decentraland (MANA) & The Sandbox (SAND).