Dubai’s Financial Watchdog (DFSA) to Draft Regulatory Framework For Crypto
Within the United Arab Emirates' financially free zone, the Dubai Financial Services Authority serves as its all-encompassing regulator. The DFSA has been outspoken on the topic of cryptocurrencies and has since announced that it will be creating a framework for wide-reaching regulations for digital assets – including cryptocurrencies.
The plan was made public through the organization's business plan for 2021/22 – which was published this week.
In a statement from this week, the regulator reiterated its dedication to remaining ‘open for business' when it comes to new and existing innovations within the financial services sector.
“We continue to explore how our regulatory regime can accommodate new and innovative business models.”
During an interview with The National, DFSA's Head of Strategy, Policy, and Risk, Peter Smith, shed some light on the wide scope that such regulation would entail.
“We will look to regulate a wide range of digital assets. Including security tokens, utility tokens, the various types of exchange (or payment) tokens, such as cryptocurrencies… We will regulate these markets in a proportionate and thoughtful manner, drawing on best practices across the globe.”
Dubai's Progressive Approach to Crypto
For the moment, just what is involved in a ‘proportionate and thoughtful manner' remains to be seen. But considering that Dubai already has a range of rules related to crypto in place, this could be seen as bringing together formalization and incentives to lure digital asset companies to the Emirates.
Dubai's first regulatory rules for crypto assets were published in June 2018 by the FRSA and has been actively engaged with crypto-based companies ever since.
Just recently, amid its ongoing scrutiny by the United States' Securities and Exchange Commission, Ripple previously established a new regional base within Dubai. Ripple CEO Brad Garlinghouse had initially shortlisted countries like the UK, Singapore, and the UAE for their clear regulatory frameworks.