The securities regulator in the United Arab Emirates (UAE) has signed an agreement that will allow digital currency trading in one of the free zones in Dubai. The agreement will allow the free zone’s authority to issue licenses to digital currency businesses as the UAE seeks to position itself at the heart of the ever-growing industry.
Free zones in the UAE are special economic zones set up to offer tax concessions and custom duty benefits to the businesses operating within them.
The Securities and Commodities Authority (SCA) and the Dubai World Trade Centre Authority (DWTCA) have entered into an agreement to support the regulation, issuance, listing, and trading of digital assets within the latter’s free zone.
The agreement will allow DWTCA to issue necessary licenses and approvals for the conduct of financial activities relating to digital currencies. While the DWTCA handles the license issuance, the securities regulator will handle the regulatory oversight relating to the issuance, listing, and trading of these assets. It will also monitor entities operating within the free zone.
Maryam Al Suwaidi, the acting CEO of the SCA, signed the agreement on behalf of the regulator. In her comments, she revealed that the agreement comes following a directive by the UAE’s Minister of Economy who has been pushing various government departments to enhance cooperation and exchange knowledge amongst themselves.
“The SCA will be responsible for the regulatory supervision of offering, issuing, trading and listing crypto assets and the licensing of financial activities related to them within the limits of the DWTCA free zone. The SCA will also supervise, control and investigate the licensed entities that operate within the free zone,” she commented.
The two authorities will offer mutual technical support to enhance their understanding of each other’s financial systems. They will also provide professional services that specify the responsibilities and obligations of both parties.
Helal Saeed Al Marri, the director general of the DWTCA commented, “With the rise of new technologies such as non-fungible tokens set to play an important role in the future of commerce […] DWTCA is also pursuing ways to offer a sustainable home for this ecosystem, in order to stay future ready. The UAE has been at the forefront of blockchain research and implementation and our ambition is in line with the Emirates Blockchain Strategy.”
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