Dubai financial regulator working on regulations for cryptocurrencies

The Dubai Financial Services Authority, the financial regulatory agency for the special economic zone, the Dubai International Financial Centre, is looking to enhance local cryptocurrency-related regulations.

The DFSA is planning to introduce a regulatory framework for diverse digital assets as part of its 2021–2022 business plan released on Jan. 18.

According to the DFSA, the upcoming crypto framework will further expand the DFSA’s regulation of digital asset issuers and associated trading platforms. The framework will include a number of digital asset types like tokenized securities and cryptocurrencies like Bitcoin (BTC):

“We will build upon recent achievements in this space over the business planning period through developing a regulatory regime for digital assets (such as tokenised securities and crypto-currencies), having already implemented regulations supporting various innovative business models.”

A spokesperson for the DFSA told Cointelegraph that the authority plans to publish two consultation papers seeking feedback on the upcoming rules in 2021. Depending on feedback from the consultations, the agency expects to adopt the new rules in the second and third quarters of 2021.

The representative added that the upcoming rules would represent a comprehensive regulatory framework, drawing on best practices from global jurisdictions. The framework will specifically include Anti-Money Laundering measures, the spokesperson said:

"We will set out the obligations firms will need to meet to protect consumers, to ensure market integrity, to run their businesses soundly, and to meet AML and CTF obligations, when carrying on business using digital tokens of all sorts."

The UAE’s first cryptocurrency-related rules emerged more than two years ago. In June 2018, the Financial Services Regulatory Authority, or FSRA, of the Abu Dhabi Global Market published guidance on cryptocurrencies, exchanges and initial coin offerings. The FSRA continued to actively engage with the industry, granting several regulatory approvals to companies like the BitOasis cryptocurrency exchange in 2019.