Since Gibraltar introduced its world-leading DLT Regulations in 2018 to regulate businesses using blockchain technology, there has been a noticeable flurry of other jurisdictions seeking to introduce regulations that will attract the right kind of players.
The United Arab Emirates is now openly seeking to join the list of leading destinations for blockchain related businesses, promising regulations for ICOs will be introduced by the middle of 2019.
The National, UAE’s daily newspaper, made the announcement on December 24th, quoting Obaid Al Zaabi, the SCA chief executive, as saying: “We have signed agreements with law firms to come up with the sandbox and rule books for the issuance of ICOs.”
It is expected that the legislation will by drafted by the end of the first half of 2019, and the SCA will then proceed to work with Abu Dhabi Securities Exchange and Dubai Financial Market to develop the infrastructure for the exchanges and trading platforms. The SCA plans to facilitate Abu Dhabi and Dubai stock markets with the adoption of blockchain technology for issuing ICOs.
Despite the drop in the value of bitcoin and the lessening of the forward drive of ICOs, the UAE states it is responding to clear demand for the issuance of crypto assets and tokens. It also recognises the value of regulation to attract responsible blockchain businesses and crypto investors with its emphasis on security. Mr Al Zaabi explained that the SCA is planning to authorise only a very select secured asset class for the issuing of ICOs, and views the element of security and transparency provided by the blockchain as a way of adding value to the UAE’s current systems, as well as reducing costs and increasing transaction speeds, all of which will add to the appeal of the jurisdiction.
One of the largest Arab economies, the UAE’s entry into regulating blockchain businesses adds the country to the growing group of jurisdictions leading the world in the regulated and standardised use of ICOs.