Crypto-Friendly Dubai Issues Guidelines on Investment Tokens

October 26, 2021

As part of its efforts to give the digital financial and technology space an extra push, the Dubai Financial Services Authority (DFSA) established a regulatory framework for investment tokens effectively meeting market demands and requirements.

With the regulatory framework in place, the UAE continues to be one of the most crypto-friendly jurisdictions in the world. The framework is designed to safeguard investors and provide legal certainty for market operators.

The DFSA is in charge of monitoring and regulating financial services companies wanting to operate in Dubai and operates independently. It also licenses and regulates products and services in the financial environment.

As reported by Emirates news agency WAM, in the DFSA’s regulatory framework investment tokens are referred to as either “a Security Token or Derivative Token.” The framework details the kind of investment tokens that are permitted and can be listed on a Digital Asset Exchange in the Dubai International Financial Centre.

According to the report the creation of a new regulatory structure is the first step in DFSA’s Digital Assets Regime, closely following the suggestions made in Consultation Paper 138 published in March 2021. The consultation paper reached out to the public for feedback on DFSA’s plans for regulating Security Tokens.

The DFSA will also be providing details for unlisted securities not included by the investment tokens regulatory framework. This would then include cryptocurrencies, utility tokens, and certain stablecoins. A follow-up public consultation paper is expected to come out towards the end of this year.

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Author: Peter Siu

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