While many countries generally ban the use of bitcoins (BTC) and virtual assets, regulators in the UAE take a different approach.
The country is continuously realizing its vision of becoming a blockchain capital by offering a framework that will help crypto companies act in accordance with the laws.
The jurisdictions in the country are divided into the mainland, where the regulator is the Securities and Commodities Authority (SCA), and free zones, ie geographically defined areas within the UAE with relaxed tax and regulatory regimes.
These free zones include the Dubai International Financial Center (DIFC), regulated by the Dubai Financial Services Authority (DFSA), Abu Dhabi Global Markets (ADGM), regulated by the Financial Services Regulatory Authority (FSRA), and the Dubai Multi Commodity Center (DMCC). ), which falls under the jurisdiction of the Securities and Commodities Regulatory Authority.
In an interview with Cointelegraph, Kokila Alag, founder and CEO of Karm Legal Consultants, shared a brief overview of the country’s regulatory environment. According to Alah, SCA, the mainland regulator, provides security and opportunities for crypto and blockchain companies:
“The rules have provided security and opened up new opportunities in the UAE, making SCA a progressive regulator on the global stage as they do not neglect this vital and growing sector and are constantly working to develop an adaptive framework in line with emerging sectors such as e.g. DLT and blockchain. ”
FSRA, the financial supervisory authority ADGM, was the first to introduce rules for digital assets in the country in 2018. one of the highest jurisdictions for existing blockchain companies. ”
Alaa also discussed the rules of the Dubai International Financial Center. According to Alah, the Dubai Financial Services Authority (DFSA), DIFC’s regulator, is “one of the first regulators in the great economic freeze to set rules for security tokens.”
The current DFSA rules cover the tokenization of securities using blockchain technology and distributed ledgers, including the tokenization of shares, derivatives, bonds, bonds, certificates or fund units. However, advisory documents for stack coins, exchangeable cryptocurrencies and non-fungible tokens are still under development.
Related topics: Dubai World Trade Center creates new cryptocurrency hub and becomes regulator
Finally, Alaa referred to the DMCC. Frisonen has issued special licenses such as a DLT service provider license and proprietary cryptocurrency trading. It also has a dedicated cryptocurrency hub called Crypto Oasis, where over 130 blockchain companies are registered.
Alaa said that “DMCC is one of the most progressive regulators in this area and has led the development of the UAE’s cryptocurrency ecosystem. DMCC is a crypto-friendly regulator that provides companies with a simple basis for building a business.”
Meanwhile, cryptocurrency exchange Binance has partnered with the UAE government to help cryptocurrency exchanges and companies obtain licenses in Dubai. The company signed a Memorandum of Understanding with the Dubai World Trade Center Authority, where it launched a cryptocurrency hub.