Legal expert shared insights regarding crypto and blockchain regulations in UAE
Legal expert Kokila Alagh shared insights regarding crypto and blockchains in the United Arab Emirates.
While many countries are leaning to just ban the use of Bitcoin(BTC) and virtual assets, regulators in the United Arab Emirates are adopting a different approach.
The country has been reliably enacting its vision of becoming a blockchain capital by providing structure to guide crypto businesses on how to operate in accordance with the laws.
Jurisdictions in the country are divided between the central area, where the regulator is the Securities and Commodities Authority(SCA), and free zones for ex, geographically specific areas within the UAE with related tax and regulatory systems.
Such free zones include the Dubai International Financial Center(DIFC) which is directed by the Dubai Financial Service Authority(DFSA). Abu Dhabi Global Markets(ADGM) which is managed by the Financial Services Regulatory Authority(FSRA), and the Dubai Multi Commodities Centre(DMCC)which falls under regulatory remit of the SCA.
Kokila Alagh the founder and CEO of Karm Legal Consultants, shared a short overview of the regulatory situation in the country. According to Alagh, the SCA, the mainland regulator. gives certainty and opportunities for crypto and blockchain business.
In a meeting with Cointelegraph, Kokila Alagh, the organizer and CEO of Karm Legal Consultants, shared a short outline of the administrative circumstance in the country. As per Alagh, the SCA, the central area controller, gives conviction and amazing open doors to crypto and blockchain organizations:
“The regulations provided certainty and have opened new opportunities in the UAE, which makes SCA a progressive regulator in the global landscape, as they haven’t ignored this vital growing sector and are continuously working on developing the frameworks to adjust as per these emerging sectors like DLT, blockchain.”
The FSRA, ADGM's financial services regulator, was the first to introduce digital asset regulations in the country back in 2018. Alagh said that ADGM was also one of the first regulators globally to introduce digital securities regulations and guidelines on virtual resources, adding that ADGM is "one of the jurisdictions for established blockchain companies,"
Alagh also discussed guidelines in the DIFC, As per Alagh, the DFSA, DIFC's regulator, "is one of the first regulators from a giant financial free zone to acquire guidelines regard to security tokens."
Current DFSA regulations cover the tokenization of securities through blockchain and distributed ledger technology, including the tokenization of shares, derivatives, bonds, debentures, certificates, or units of a fund. However, consultation papers for stablecoins, fungible cryptos, and non-fungible tokens are still in the process of being drafted.
Alagh noted DMCC, the free zone issued special licenses like DLT technology service provide license and proprietary trading in crypto commodities license. it also has a crypto dedicated center called Crypto Oasis, where more than 130 blockchain companies have registered.
Alagh said that "the DMCC is one of the most exceptional regulators in this space and has spearheaded the development of the crypto ecosystem in the UAE. The DMCC is a crypto-friendly regulator and provides companies with a friendly environment for setting up a business."
Crypto exchange Binance has set out to collaborate with the UAE government to help crypto exchanges and businesses to get their licenses in Dubai. The firm signed an update of comprehension with the Dubai world trade center authority as they launched a crypto hub.
Read: UAE joins the race for in-house digital currency experiments