The Dubai Financial Services Authority, the financial regulatory agency for the special economic zone, the Dubai International Financial Centre, is looking to enhance the cryptocurrency-related regulations. The DFSA is planning to introduce a regulatory framework for diverse digital assets as part of its 2021–2022 business plan released on January 18. According to the financial regulator, the upcoming crypto framework will further expand the DFSA’s regulation of digital asset issuers and associated trading platforms. The framework will include a number of digital asset types like tokenized securities and cryptocurrencies like Bitcoin.
Consultation papers will be released in the first two quarters of 2021.
According to a local news agency, The National report, the DFSA plans to publish two consultation papers seeking feedback on the upcoming rules. Peter Smith, the DFSA’s head of strategy, policy, and risk, said that the two consultations would be released in the first two quarters of 2021. “We will look to regulate a wide range of digital assets, including security tokens, utility tokens, the various types of exchange tokens, such as cryptocurrencies, and the firms that provide relevant services in these markets,” Smith noted.
Crypto regulations continue to remain in a grey area.
As reported earlier, a ban on the sale of cryptocurrency derivatives to retail investors in the U.K. has officially gone into effect. The ban was proposed by the Financial Conduct Authority (FCA) in October and became law on January 6 this year. The U.K.’s financial regulator FCA said that crypto derivatives weren’t suitable for retail customers because of their harm. The crypto derivatives ban in the U.K. will drive retail users to unregulated platforms like Deribit and BitMEX who will offer even less protection than the regulated players. So, it’s not clear how the average retail user wins in this scenario.” Several other countries are also trying to regulate the crypto industry, including the United States.