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Dubai Announces Regulations for Investment Tokens

Dubai has established a regulatory framework for digital assets. It is also planning to expand the current purview of the framework.

The Dubai Financial Services Authority (DFSA) has formulated and established a regulatory framework for Investment Tokens, as per an announcement from Monday.

DFSA is the financial regulator of the Emirate of Dubai. It licenses and regulates financial companies, products, and services.

The framework implements the proposals outlined in Consultation Paper 138. It is the culmination of the first phase of the DFSA’s Digital Assets regime.

The regulation defines Investment Tokens as a cryptographically secured Security or Derivative that is issued, transferred and stored using Distributed Ledger Technology (DLT) or similar technology.

The regulation applies to “persons interested to market, issue, trade or hold Investment Tokens in or from the Dubai International Financial Centre (DIFC) and Authorised Firms wishing to undertake Financial Services relating to Investment Tokens.”

The DFSA is also preparing proposals to cover “exchange tokens (also known as cryptocurrencies), utility tokens and certain asset-backed tokens (stablecoins)” under the Investment Tokens regulatory framework.

Peter Smith, Managing Director, Head of Strategy, Policy and Risk at the DFSA said: “Creating an ecosystem for innovative firms to thrive in the UAE is a key priority for both the UAE and Dubai Governments, and the DFSA. Our consultation on Investment Tokens enabled us to understand what firms were looking for in a regulatory framework and introduce a regime that is relevant to the market. We look forward to receiving applications from interested firms and contributing to the ongoing growth of future-focused financial services in the DIFC.”

Dubai is trying to position itself as a global tourist and financial services hub, moving away from oil as the prime source of income. Hence, it is quite bullish in the crypto industry. Recently, it hosted the Crypto Expo Dubai which acted as a forum to connect investors and entrepreneurs.

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