The regulatory arm of the United Arab Emirates (UAE)’s special economic zone, the Dubai International Financial Centre (DIFC), has unveiled a consultation paper outlining its proposed regulatory regime for crypto tokens.
Changes made to the Draft Legislation
The Dubai Financial Services Authority (DFSA), the financial regulatory agency of UAE’s special economic zone, the Dubai International Financial Centre (DIFC), has released a consultation paper proposing a regulatory regime for crypto tokens.
The DFSA said the public has until May 6, 2022, to comment on the regulatory agency’s proposal “for a regulatory regime for persons wishing to provide financial services activities in respect of crypto tokens.” Once the public consultation phase is over, DFSA will then make the changes to the draft legislation as it sees fit. You can read the paper here.
After the public consultation we will determine which modifications to the regime are required and then amend the draft legislation accordingly. For his approval, His Highness will submit the revised Regulatory Laws and Markets Laws to the DIFC President and for Assent to His Holiness the Ruler Dubai.
According to the DFSA, a final version will be posted on their website. On the other hand, the regulatory agency said interested parties “should not act on the proposals until the relevant changes are made.”
Excluded or Prohibited Tokens
In a consultation paper, the DFSA clarified that these proposals are only for crypto tokens and not investment tokens. According to the regulatory agency, investment tokens — previously referred to as security tokens — are dealt with in a different consultation paper.
In the latest consultation paper, crypto tokens are distinguished from what is referred to as prohibited or excluded tokens. According to the DFSA, excluded tokens consist of utility tokens which are “a type of token that has a specific use case within a closed ecosystem.” Non-fungible tokens (NFTs) and Central Bank Digital Currencies (CBDCs) are also on the list of the DFSA’s so-called excluded tokens.
Privacy tokens and devices, plus algorithmic tokens, are listed in the DFSA’s consultation paper as the prohibited tokens. The regulatory agency said it is proposing to “ban these tokens and introduce a prohibition that no public offer or promotion” of any such tokens should take “place in or from the DIFC.”
Your thoughts? Please comment below to let us know your thoughts.
Image creditShutterstock. Pixabay. Wiki Commons
DisclaimerThis information is provided for educational purposes only. It does not constitute an offer, solicitation, or recommendation of any company, products or services. Bitcoin.com doesn’t offer investment, tax or legal advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.
