The UAE’s financial regulator has approved a regulatory framework for trading crypto assets in one of Dubai’s free trading zones.
The United Arab Emirates’ Securities and Commodities Authority (SCA) has signed an agreement with the Dubai World Trade Centre Authority (DWTCA) to support regulation of cryptocurrencies within DWTCA’s free zone, Reuters reports.
The new initiative establishes a framework enabling the DWTCA to issue necessary approvals and licenses for financial activities related to cryptocurrencies. As part of the agreement, the SCA will also supervise major crypto-related activities, such as issuance, listing, trading and licensing processes.
The agreement was signed by H.E. Dr. Maryam Al Suwaidi, Acting CEO of the SCA, and H.E. Helal Saeed Almarri, Director General of DWTCA and Dubai Department of Tourism and Commerce Marketing (DTCM).
“The SCA will be responsible for the regulatory supervision of offering, issuing, trading and listing crypto assets and the licensing of financial activities related to them within the limits of the DWTCA freezone,” Dr. Maryam Al Suwaidi said. “The SCA will also supervise, control and investigate the licensed entities that operate within the free zone.”
H.E Almarri said the decision to make blockchain-based businesses part of the rapidly expanding DWTCA free trade zone is in line with Dubai’s drive towards an innovative and fully digital economy.
“The DWTCA is committed to expanding its services as a free zone of choice for the international investment and entrepreneurial community. As Dubai continues its drive towards innovation and digital-led economy, DWCA is looking to support businesses underpinned by blockchain and cryptographic technologies,” H.E Almarri stated.
Under the new agreement, crypto businesses will come under the purview of the SCA. The agency will supervise the offering, issuance, listing, and trading of crypto assets, as well as the licensing of related financial activities within the DWTCA.
The authorities have made it clear that they plan to implement amenable regulations that would enable crypto startups to strive, while also protecting the interest of consumers.
“With the rise of new technologies such as NFTs set to play an important role in the future of commerce, and building on the Future Blockchain Summit, our globally-recognized even in this sector, DWTCA is also pursuing ways to offer a sustainable home for this ecosystem, in order to stay future-ready,” added Almarri.
The new agreement further reinforces the UAE’s growing commitment to become a crypto-friendly global hub.
In April, Minister of Economy Abdulla Bin Touq Al Marri declared that cryptocurrencies and asset tokenization will be key to the country’s plans to double its economy in 10 years. The local stock exchange, Nasdaq Dubai, listed a public Bitcoin fund by Canadian digital asset investment fund manager 3iQ in June.
In July last year, Dubai Department of Economic Development (DED) and Emirates NBD, Dubai government-owned bank, launched a joint blockchain-based platform for Know Your Customer verifications. The so-called UAE KYC Blockchain Platform is designed on securing digital customer onboarding, instant bank account functionality and sharing of verified KYC data between banks.