Aerial view of Dubai Palm Jumeirah island in the United Arab Emirates. Shutterstock
The Dubai Financial Services Authority (DFSA) is drawing up a new framework that would regulate digital assets in the emirate.
The move was announced as part of DFSA’s 2021/2022 business plan, released on 18 January. According to the document, the DFSA will expand existing regulations supporting innovative business models to include specific regulatory regimes for digital assets.
Peter Smith, the head of strategy, policy, and risk at DFSA, said the agency would draw on the best practices around the world to regulate the digital asset market. In an interview with local news agency The National, Smith said the regulation will cover a wide range of digital assets, including security tokens, utility tokens, and traditional cryptocurrencies. Companies providing services in the cryptocurrency market will also be covered by the regulation, he added.
The National reported the DFSA will publish two consultation papers seeking views on the rules it proposes. The first paper will be published in the first quarter of the year, while the second one will be released sometime in Q2, the report said.
If passed, the new regulation will be the second time a cryptocurrency law was introduced to the emirates. The Financial Services Regulatory Authority (FSRA), the regulator of the Abu Dhabi Global Market, published its first guidance on cryptocurrencies in 2018. The regulation granted in-principal approval to several cryptocurrency exchanges operating in the region.