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Asian financial hub Dubai is set to have robust regulations governing the use of cryptocurrencies within its region. This was revealed by the Dubai Financial Services Authority (DFSA), the financial regulator for the emirate’s financial free zone.
A legal framework for crypto-assets
This latest development was revealed in the DFSA business plan released on Monday. According to the report, the DFSA will also regulate different digital assets, including security tokens and payment tokens.
These regulations will cover crypto-assets and firms that provide crypto services and related services. The agency also revealed that it would publish two consultation papers seeking industry views on its proposed rules. The consultation papers will be released in the first and second quarters of the year.
Speaking on the development, Peter Smith, the head of the strategy, policy, and risk at DFSA, revealed some key details. He further stated that the agency would ensure that crypto markets are regulated properly. “We will regulate these markets proportionately and thoughtfully, drawing on best practices across the globe.” He said.
Crypto regulations a major agenda for regulators globally
Crypto regulations have been the talk within the financial sector of many countries across the globe. The unique nature of cryptocurrencies has also made it a delicate subject for financial regulators across the world. Some countries have proposed a robust legal framework for cryptocurrencies as they look to regulate the growing sector.
In the Middle East, there have also been key steps towards ensuring that crypto assets are regulated. The Abu Dhabi Global Market’s Financial Services Regulatory Authority published a guide on cryptocurrencies in 2018. This served as a precursor for the approval of several crypto exchanges in 2019 within its region. The Central Bank of Bahrain also published regulations governing crypto assets in the country in 2019.
The DFSA plan is not new in the region and will help create a clear distinction on the use of crypto-assets in the Middle East financial hub. Dubai has become a major home for crypto firms in recent years due to its low taxation policy. It will be interesting to see how the crypto sector’s impending regulations will be received in the financial hub.