On November 1st, the Dubai Financial Services Authority (DFSA), the organization in charge of regulating the Dubai International Financial Centre (DIFC), released its “regime” regarding cryptocurrency tokens.
The implementation of a regulatory framework for crypto assets in October 2021 is the focus of this second phase of the DFSA’s work.
While still upholding the DFSA’s regulatory goals, the crypto token regime seeks to promote innovation in a controlled, responsible, and transparent manner. It strives to promote a market for cutting-edge financial products while safeguarding client interests.
Moreover, according to the announcement, the regime not only conforms with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, but also handles issues connected to consumer protection, market integrity, custody, and financial resources for service providers.
Per DFSA Chief Executive Ian Johnston, as a forward-thinking regulator, the DFSA is aware of the rising demand for cutting-edge financial products. They have considered input from a wide range of stakeholders as they attempt to create an extensive Crypto Token regulation.
However, the DFSA introduced its framework for token regulation in October of last year. The framework was the first stage of the DFSA’s Digital Assets regime, and it was based on ideas presented in a consultation document the watchdog released in March 2021.
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Tokens cannot be used in the DIFC unless they have received DFSA approval and satisfy specific standards. A preliminary list of approved crypto coins will be posted on the DFSA website
Any business that wishes to do cryptocurrency token-related business in or out of the DIFC, regardless of whether it is currently accredited by the regulators, may submit an application via the DFSA website.
Although a number of cryptocurrency exchanges have been given permission to operate in financial-free zones, the central bank of Dubai does not license cryptocurrencies.