Kokila Alagh, a legal expert, shared views about crypto and blockchain rules in the United Arab Emirates.
Although several nations merely restrict the use of Bitcoin (BTC) and other digital assets, authorities in the United Arab Emirates are considering a diverse approach.
The nation has been continuously executing its goal to become a blockchain capital by creating schemes to assist crypto enterprises about how to operate legally.
The country's jurisdictions are split into the mainland, where the Securities and Commodities Authority (SCA) is the supervisor, and free zones, which are geographically defined territories inside the UAE with reduced taxes and regulatory frameworks.
The Dubai International Financial Centre (DIFC), governed by the Dubai Financial Services Authority (DFSA), Abu Dhabi Global Markets (ADGM), controlled by the Financial Services Regulatory Authority (FSRA), and the Dubai Multi Commodities Centre (DMCC), regulated by the SCA, are examples of such free zones.
Kokila Alagh, the founder and CEO of Karm Legal Consultants, provided a summary of the regulatory environment in the country during an interview. The SCA, the mainland regulator, gives clarity and opportunity for crypto and blockchain firms, according to Alagh:
“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 ADGM's financial services regulator, the FSRA, became the first in the nation to implement virtual asset rules in 2018.
Alagh further stated that ADGM was one of the first authorities in the world to initiate digital securities rules and virtual asset guidelines and that ADGM is "one of the topmost jurisdictions for established blockchain companies."
Alagh also talked about the DIFC's regulations. The DFSA, DIFC's regulator, “is one of the first regulators from a major financial free zone to bring regulations regarding security tokens.” according to Alagh.
The present DFSA regulations include the tokenization of securities via blockchain and distributed ledger technology, along with the tokenization of shares, derivatives, bonds, debentures, certificates, or fund units. Consultation papers for stablecoins, fungible cryptos, and nonfungible tokens, on the other side, are in the process.
Then, Alagh mentioned DMCC. The free zone provided special licences like the DLT technology service provider license and the proprietary trading in cryptocurrency commodities license. It also features a Crypto Oasis, a crypto-centred hub where over 130 blockchain firms have been listed.
Alagh said “the DMCC is one of the most advanced 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 framework for setting up a business.”
Furthermore, Binance has announced plans to cooperate with the UAE government to help crypto exchanges and businesses obtain licenses in Dubai. As part of the development of a crypto centre, the company signed an agreement with the Dubai World Trade Centre Authority.
