In Hopes Of Increasing Bitcoin Belief, Abu Dhabi Regulators Push For International Efforts
Every country around the world is tackling cryptocurrency regulations in different ways. In Abu Dhabi, the international financial center and free zone is seeking to set up stricter regulations for crypto trading, along with ICOs. However, instead of taking it down alone, they want to establish “proper” international regulations. These decisions were announced by The National on Wednesday morning.
Abu Dhabi first instituted their guidelines for both crypto and ICOs last year, making it easy to regulate the industry in their part of the world. To expand on this, the Financial Services Regulatory Authority (FSRA) has made the generous decision to share the framework with the rest of the world. FSRA’s Richard Teng, who is the head of the Abu Dhabi Global Market (ADGM), said that the potential for loss and theft weakens these digital assets.
As such, Teng said,
“This space needs to be properly regulated, otherwise there is the risk of financial crime.”
“Every time a coin gets stolen or lost, it affects the confidence in this asset class.”
Teng discussed the ways that so much has changed in the last few months, as the industry seems to ignore the need to be responsible in their development and regulation of this sector.
He went on, noting,
“We are confident that our comprehensive regime – which we have shared with global regulators like the [U.S.] SEC, the UK Treasury, Financial Conduct Authority and Bank of England, and regulators in Singapore, Hong Kong and Japan – can address these risks and bring greater confidence into this asset class.”
The ADGM is one of the first places that created specific guidance for crypto firms last year, enforcing regulations back in June 2018. In these regulations, there are specific guidelines that discuss the roles of exchange operators and crypto custody firms. These entities have gone as far as to associate cryptos as commodities, much like with precious metals, and they see the benefit of using cryptocurrency as payments.
The FSRA capital markets director, Wai Lum Qwok, said,
“[W]e do a lot of challenges in regulating something which was designed not to be regulated.” However, he believes that the organization will be open to other ideas in the future. Earlier this year, he commented, “The FSRA notes that virtual currencies, although not legal tender, are gaining interest globally as a medium of exchange for goods and services.”
There should be some formal regulations rolled out nationwide soon, which will impact the functioning of fintech and Initial Coin Offerings (ICO). A local Dubai police chief even made comments that he believed in the idea that digital currency could take over traditional fiat currency, though other officials think that the bank needs to release a token of their own.