Dubai – which has grown exponentially over the years as a leading digital currency hub – is expanding its reputation thanks in part to the Dubai Financial Services Authority (DFSA), the regulatory entity of the region. The organization is now unveiling a new digital currency regime designed to boost crypto-based innovation and regulatory strategies.
Dubai Is Growing Its Crypto Friendly Sector
The goal is to make the crypto arena in Dubai as transparent as possible according to a statement regarding the agency’s objectives. Chief executive of the DFSA Ian Johnston said:
As a progressive regulator, the DFSA recognizes the growing interest in innovative financial products. Our work to develop a comprehensive crypto token regime has [considered] feedback from a broad range of stakeholders. It aims to strike a balance between encouraging innovation in the DIFC and protecting the consumers of these financial products.
Crypto regulation has been at the forefront of several governments over the past few months, a prime example being the government of the United States. Earlier in the year, a crypto executive order was issued asking financial companies and agencies throughout the nation to commit themselves to crypto-based research so they could better understand how crypto assets can negatively and positively impact traders in America.
The order also opened the door to a digital version of USD. Now, it looks like Dubai is taking a page out of this book and seeking to regulate digital asset activity to ensure all goes smoothly within its borders.
The idea of regulation has always been a two-sided coin (pardon the pun). On the one hand, it can be argued that regulation goes against everything the digital currency scene stands for. The goal was to ensure that there were no prying eyes in the mix. Traders and users would be free of third parties and middlemen having a say in what can and cannot be done with their hard-earned money.
This was all designed to give traders their financial freedom and autonomy, which in the long run, isn’t a bad idea. At the same time, the crypto space – largely due to the lack of regulation – has been subjected to various criminal incidents that have seen exchanges get hacked and many individuals victimized by fraudulent projects that steal their funds. Many argue that some degree of regulation is necessary. Otherwise, the crypto space will never attain the legitimacy and mainstream attention it deserves.
Keep Players Protected
In its regulatory draft, the DFSA has stated it aims to implement appropriate protection issues to ensure traders’ data and assets aren’t stolen. The framework will also seek to prevent money laundering and implement newfound market integrity to ensure all traders remain shielded against illicit actors.
Lastly, all crypto companies seeking to offer services in Dubai must become registered with the DFSA.