DFSA introduces regulation for investment tokens

The Dubai Financial Services Authority (DFSA) has announced new regulatory framework for investment tokens.

With the new regulation, DFSA aims to stimulate the digital financial and technological environment while at the same time meet the demands and requirements of the market players.

According to DFSA, the regulatory framework defines investment token as either “Security Token or a Derivative Token.”

Peter Smith, Managing Director, Head of Strategy, Policy and Risk at the DFSA said:

Creating an ecosystem for innovative firms to thrive in the UAE is a key priority for both the UAE and Dubai Governments, and the DFSA. Our consultation on Investment Tokens enabled us to understand what firms were looking for in a regulatory framework and introduce a regime that is relevant to the market. We look forward to receiving applications from interested firms and contributing to the ongoing growth of future-focused financial services in the DIFC.

The regulator is also is drawing up proposals for tokens which are not covered under the investment token regulatory framework such as cryptocurrencies and stablecoins. DFSA plans to issue a second consultation paper later in the fourth quarter of the year.

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