The UAE, Japan, and Singapore have emerged as the trendsetters in regulating the crypto market effectively, top European academic Guy Burton said, citing The Dubai Financial Services Authority explicitly included a crypto regulatory framework in its 2021 business plan.
Guy Burton, an Adjunct Professor at the Brussels School of Governance, where he teaches politics and international relations, noted in a recent article on BrusselsReport.eu:
“As crypto assets are moving into the mainstream, over the past year, their value has exploded, and with a number of ambitious initiatives taking place across Asia and the Gulf, digital assets are becoming a financial force to be reckoned with.”
He published an article titled “Getting it right on crypto regulation” on BrusselsReport.eu, a website featuring news and analysis covering European Union policy, Eurozone affairs, and Investment, where he pointed out that in the UAE, the Dubai Financial Services Authority explicitly included a crypto regulatory framework in its 2021 business plan.
“Since the start of the year, the country has begun to put it into action. The UAE has adopted elaborate regulations as well as established a dedicated regulatory body,” Burton explained. “The country has already issued licenses for more than 30 exchanges to be set up. That, along with officially sanctioned crypto mining, should mean that the country’s share of the global crypto market should grow more than the $26 billion from last year.”
In his words, by pushing ahead to promote cryptocurrencies and ensure official oversight, the UAE puts it ahead of other countries and jurisdictions, who will be keen to see what effect the recent changes will have.
The academic mentioned that while Singapore or the UAE lack the EU’s size, they have another advantage: they can be fleet of foot. Countries like the UAE have a comparative advantage over some other jurisdictions that are just starting their regulation journey.
Burton noted that the UAE has moved past the stage of appealing for existing authorities to work together. Unlike the EU, it does not have years to wait before the legal framework is fully in place.
“With measures already in place, the Emirati authorities are able to see what will work and what does not – and giving it the chance to respond in a timely and effective fashion. In sum, then, it is very likely that plenty of eyes will be on such trendsetters as Singapore and the UAE in the next few years as the digital assets market solidifies its role in the future of finance,” the professor claimed.
Since this February, the UAE started to issue federal licenses for virtual asset service providers (VASP), looking to attract some of the world’s leading crypto companies.
The country’s federal securities regulator, the Securities and Commodities Authority (SCA), has developed a licensing framework that would let VASPs like crypto exchanges set up shop in the country.
In the new rules, Abu Dhabi considered the Financial Action Task Force’s (FATF) latest guidance on regulating cryptocurrencies and the strategies employed by the UK, US, and Singapore. Ultimately, it settled for a hybrid approach whereby the SCA and the central bank would be responsible for regulation, while the regional financial centers would have autonomy concerning day-to-day licensing procedures.