In its efforts to establish a robust infrastructure for cryptocurrency laws and securities token regulations in the city, the Dubai financial services authority (DFSA) has released a press release statement today. Part of the statement is for the populace to send in their comments on the planned laws for virtual assets regarded as security tokens.
These submissions of comments will close after 30 days and those comments will form part of the conditions for establishing a “framework for regulating security tokens” by the DFSA. There are three focus areas for Dubai’s security token framework. One of the areas is the creation of a properly-monitored structure to offer and trade virtual assets to all traders (retail buyers and investors).
The second area deals with quality control measures that will help retail investors avoid fraud. Also, the prospectuses of token issuers must contain strict disclosure requirements. The last area of focus for the DFSA is support services for security tokens such as advisory services and custody providers.
The Plan to Turn Dubai Into A Next-Gen Financial Hub
One vital area where blockchain can help the current financial market in Dubai is the provision of security tokens. Thus, making it possible for this region to dominate the financial markets in countries of the mid-eastern region. Bryan Stirewalt, a top officer with the DFSA, commented that “this plan for the monitoring of security tokens is an important step in providing a straightforward and specific plan for any issuer willing to raise funds in or from the Dubai international finance center (DIFC) through technologies such as the distributed ledger technology (DLT). Also, firms that are already in this market can use this regulation to conduct or provide financial services.”
Bryan’s comments were aimed at clarifying issues about security token laws built with the decentralized ledger technology. Stirewalt affirms the DFSA’s objective of balancing innovation in the virtual assets ecosystem with proper regulatory procedures. As of this moment, the plan is for this regulatory body to publish the cryptocurrency rules for all tokens before the year runs out.
Stirewalt continued saying, “apart from promoting and encouraging innovation, our proposals reduce risks, especially ML/FT risks, deals with market integrity, and protects customers. We’ve based it on the experiences of similar regulators who have shown clear forethought in developing this fast-rising niche. Also, we have included the peculiar needs of the DIFC and we anticipate public comments on the proposals.”
Other Countries Are Also Implementing the Same Steps
In recent times, the city located in the Gulf region has become an attractive destination for crypto and blockchain-related technological advancements. Last month, a state-owned incorporation firm called Kiklabb started accepting digital currency payments. Last year July, the UAE government initiated a nationwide data platform using a blockchain-built platform. Financial regulators in other countries and regions are planning to follow in the DFSA’s footsteps. One such country is Mauritius. The country recently established a basis for regulating security tokens, and some companies are already being licensed.