The Dubai Financial Services Authority, or DFSA, continues its efforts to create a unified framework for regulating cryptocurrencies for urban areas.
According to a press release from the Dubai Financial Services Authority released on Monday, the Dubai Financial Supervisory Authority asked the public to comment on the proposed rules for cryptocurrencies, which are considered security codes.
The public comment phase of the process will last for 30 days and is part of the modalities for implementing the DFSA Security Token Regulation Framework.
The security code infrastructure in Dubai aims to provide regulatory clarity in three main areas. The first part deals with creating a structured structure for offering and trading digital securities to investors, including retail buyers.
The DFSA is prioritizing quality control protocols to protect retail investors through security code issuers who adhere to strict disclosure requirements in their publications.
The third area of concern to the DFSA is related to security code support services. This includes storage providers and consulting services.
The Chief Executive of the Dubai Financial Services Authority, Brian Sterwalt, stated the need for clear rules for security codes based on the decentralized accounting technology:
“The security token regulation proposal is an important milestone in establishing a clear and safe pathway for issuers looking to raise capital to and from the DIFC through DLT and similar technologies. And for those companies that intend to enter this market through business or provide financial services.”
Sterwalt said the DFSA’s goal is to find a balance between regulatory oversight and fostering innovation in digital assets. The regulator plans to publish laws on instrument markings and “exchange codes” later in 2021.
In fact, the city has become a center for crypto and blockchain technology in the Gulf region. Last February, Kiklabb, a government-licensed company, began accepting payments for cryptocurrency.
In July 2020, the UAE introduced a blockchain-based Know Your Customer (KYC) platform.