SCA To License Crypto Trading In Dubai Freezone
The two will have oversight on cryptocurrency trading and partake in regulating and legalizing cryptocurrency trading within the DWTCA freezone.
The agreement between the two regulators was signed by Dr Maryam Al Suwaidi, the acting CEO of the SCA and Helal Seed Al-Marri, the Director-General of the DWTCA.
The new regulations will allow the DWTCA to gain oversight over the licensing of firms seeking to offer cryptocurrency trading services in the zone.
The SCA will be the regulatory body that will play a central role in regulating crypto trading activities. Some of the services that the SCA will regulate include crypto offerings, listing, trading and licensing any crypto assets traded in the DWTCA zone.
According to the acting CEO of the SCA, the move will help the regulator achieve its objective of teaming up with other agencies to achieve harmony in financial market regulations, as per the directives issued by the board Chairman of the Ministry of Economy and SDCA, Abdulla bin Touq Al Marri.
While the DWTCA will still have some form of oversight over crypto asset firms, Dr Al Suwaidi stated that the terms of the agreements said,
“the SCA will also supervise, control, and investigate the licensed entities that operate in the free zone.”
Supporting Crypto Innovation
In the announcement, Al-Marri stated that
“The Dubai World Trade Center Authority is committed to expanding its services as a free zone of choice for the international investment and entrepreneurial community. As Dubai continues its drive towards an innovative and digital-led economy, DWTCA is looking to support businesses underpinned by blockchain and cryptographic technologies.”
Al-Marri also noted that the partnership between the DWTCA and the SCA would broaden the regulatory scope of the freezone and bring about a centralized regulatory framework for the crypto market in the zone.
He also noted that Dubai was pushing towards innovation; hence blockchain-savvy firms will play a crucial part in the future of global payment systems. One of the blockchain technologies he mentioned was non-fungible tokens, which he stated would play a critical role in the future of commerce.
He further added that the DWTCA was actively looking into boosting sustainability to ensure it is future-proof. It is not the first time that the SCA and the DWTCA have agreed to regulatory oversight in the zone.
However, the recent move shows that the DWTCA and the SCA are committed to making the zone a crypto-friendly hub to attract local and foreign investments. The agreement also comes at a time when crypto activities have reached a peak.
Besides supporting cryptocurrencies, Dubai has been in the frontline to adopt blockchain technologies and leverage the potential of this sector. The region launched the Smart Dubai initiative in 2020, intending to use decentralized ledger technology to power an entire city.
In 2020, Mashreq Bank, one of the oldest private banks in Dubai, announced that it was using blockchain technology to enhance the security of customer data and create a smart banking capability that would make transactions faster, cheaper and easier. This was a one-of-a-kind initiative by a traditional banking institution.