Middle East is growing in terms of crypto adoption at a fast rate. Regulatory frameworks to support crypto-related financial services are also following the trend in the region.
The United Arab Emirates’ Securities and Commodities Authority has signed an agreement with the Dubai World Trade Centre Authority (DWTCA). This agreement aims to support the regulation and trading of cryptocurrencies in DWTCA’s economic-free zone.
Agreement details
The agreement establishes a framework that allows the DWTCA to issue the necessary approvals and licenses for the conduct of financial activities relating to cryptocurrencies.
As part of the agreement, the SCA will also oversee major crypto-related activities. These include supervising the issuance, offering, listing, and trading of cryptocurrencies. As well as the licensing of the associated financial activities that fall under DWTCA’s jurisdiction. Acting CEO of SCA Dr. Maryam Al Suwaidi and Director-General of the DWTCA and Dubai Department of Tourism and Commerce Marketing (DTCM), Helal Saeed Al Marri, signed the agreement.
Dr. Al Suwaidi stated, “The SCA will be responsible for the regulatory supervision of offering, issuing, trading, and listing crypto assets and the licensing of financial activities related to them within the limits of the DWTCA free zone. The SCA will also supervise, control, and investigate the licensed entities that operate within the free zone.”
The Director-General of the DWTCA said that it is committed to expanding its services as a free zone of choice for the international investment and entrepreneurial community. It is also looking to support businesses underpinned by blockchain and cryptographic technologies.
“With the rise of new technologies such as non-fungible tokens set to play an important role in the future of commerce, and building on the Future Blockchain Summit, our globally-recognized event in this sector, DWTCA is also pursuing ways to offer a sustainable home for this ecosystem, in order to stay future-ready,” he further stated. He concluded by saying that the UAE has been at the forefront of blockchain research and implementation. And therefore, the Authority’s ambition is in line with the Emirates Blockchain Strategy.
Cryptocurrency in UAE
In a bid to become a pioneer in blockchain technology, the UAE has launched the UAE Blockchain Strategy 2021. Subsequently, 50% of government transactions will be conducted using blockchain technology by 2021. To achieve this, regulations on the use of crypto assets, including cryptocurrencies, have recently been issued. Jurisdictions like Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) have come out with crypto regulations.
In June, the local stock exchange, Nasdaq Dubai, listed a public Bitcoin fund by Canadian digital asset investment fund manager 3iQ. This was the Middle East’s first listed cryptocurrency fund. With international organizations stepping in, virtual currency and blockchain technology will soon enter mainstream transactions. According to a survey, institutional investors and wealth managers in the UAE plan to increase their exposure to cryptocurrency assets between now and 2023.
