The United Arab Emirates has been one of the few jurisdictions, which has been supportive of the technology. Recently the UAE Government announced the UAE Blockchain Strategy 2021 which aims at capitalising on blockchain technology to transform 50 per cent of government transactions into the blockchain platform by 2021. UAE also happens to be the only jurisdiction around the world to have four regulators acting as incubators to blockchain projects and start-ups. Below is a small outline on the approach of these regulators:
Abu Dhabi Global Market (ADGM)
Leading the charge, ADGM was one of the first regulators in Dubai to introduce a guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations. The Abu Dhabi Global Market introduced Crypto Asset Regulatory Framework in June this year for regulating entities ‘Operating a Crypto Asset Business’ (OCAB) within ADGM, including activities undertaken by Crypto Asset Exchanges, Crypto Asset Custodians and other intermediaries. Further by way of guidance provided by the FSRA, the regulatory arm of ADGM the companies applying for an OCAB license, are required to comply with the amended Financial Services and Markets Regulations 2015, which lays down the specific requirements for obtaining such a license. The entities applying for the license are further required to comply with the requirements under the (a) Conduct of Business Rulebook, (b) the General Rulebook; (c) the Anti-Money Laundering and Sanctions Rules and Guidance and (d) Rules of Market Conduct.
The applicable requirements under the above-mentioned rules and regulations, depend upon the whether the applicant wants to issue tokens, or run an exchange, hold a custodian license or act as an intermediary for any of the related activities.
ADGM also recently announced a regulatory sandbox for selected applicants to further develop and test their fintech innovation.
Securities and Commodities Authority (SCA)
Securities and Commodities Authority, the financial regulator of Dubai had earlier this year issued a warning to investors about initial coin offerings. However earlier this month, it was announced that SCA has approved a plan to regulate initial coin offerings (ICOs) and recognize them as securities. A draft of the regulations is yet to be made available, however, this comes as positive news for crypto-start-ups and investors.
Dubai Multi - Commodities Centre (DMCC)
As a mark of support to the technology, DMCC has introduced a regulated activity under the license of ‘proprietary trading in crypto-commodities’, under which it had permitted the operation of “deep cold storage” solution for investors and traders for storing of Bitcoin, Ethereum and other altcoins in a vault.
Dubai Silicon Oasis (DSOA) - Dubai Technology Entrepreneurship Centre (DTEC)
One of the oldest and the most prominent incubators in UAE has operated as a free zone technology park for the semiconductor, microelectronic and other high-technology based companies looking to set up their regional headquarters, as well as research and development facilities in the MENA region. While DSOA has been predominantly supportive of technology based start-ups for over half a decade now, DTEC has also launched multiple programs to facilitate launching of blockchain based start-ups from DSOA. DSOA has also proposed to introduced, various regulated categories for issuance of crypto-currencies.
So far the most comforting part of launching and operating blockchain based businesses in UAE is that the both the regulators and the government is fundamentally in favor of the blockchain technology and remains progressive in its approach towards the same.
To stay updated,
subscribe to our newsletter