New DFSA regulatory framework targets investment tokens in Dubai

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TL;DR Breakdown

  • New DFSA regulatory framework targets investment tokens.
  • The framework classifies investment tokens as securities or derivatives.
  • The DFSA says it is planning to roll out regulations for cryptocurrencies.

Regulation in the crypto sector is something that has received positive feedback from investors and traders alike. This is because regulation equals to curbing of most of the illicit activities that are being perpetrated in the sector. In this regard, the Dubai Financial Service Authority has announced that it has rolled out a new regulation regarding investment tokens. The DFSA regulatory framework is a further step to bolster the digital technology sector of the country. It is also part of a more extensive play to meet the demands of players in the space as regards regulation. 

DFSA regulatory framework: investment tokens as securities or derivatives tokens

The DFSA is an independent organization that oversees the activities of financial companies across the country. It is also in charge of regulating its activities and licensing its products across the technology sector in the country. In the news by WAM, a news agency in the country, the new framework sees investment tokens as a derivative token or a security token. 

The report also states that the new regulatory framework is one of the first measures in a Digital assets regime proposed by the DFSA. The DFSA created the digital assets regime as part of suggestions made in the Consultation Paper, which the regulators created in March. The consultation paper was a way for the DFSA to seek the public’s views regarding the regulation of security tokens.

DFSA plans new framework for cryptocurrencies

In a report that traveled across the media in March, the financial regulatory body asked the public to give their views regarding tokens regarded as security tokens. This new DFSA regulatory framework regarding investment tokens is seen as a measure that will help shield investors against illicit affairs. The new framework will also serve as legal backing for operators in the crypto sector across the country. The framework will list the tokens that will be granted permission to act as investment tokens and those that will not. 

Asides from that, the tokens will also be cleared to list on the Dubai Asset Exchange. The DFSA has also pointed out that it is currently working on tokens covered under the regulatory framework. The new framework in the works will consider cryptocurrencies, stablecoins, and utility tokens. Because of this, the DFSA is expected to roll out another consultation paper in the last quarter of this year. Notwithstanding, investors are reasonably confident that the new DFSA regulatory framework is a regulation for the future.

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