The Financial Services Regulatory Authority of Abu Dhabi has put in place regulatory rules which will specifically apply to cryptocurrencies, as announced by the Abu Dhabi Global Market (ADGM) in a press release.
Abu Dhabi is the capital of and second most populous city of the United Arab Emirates, and also the capital of the Emirate of Abu Dhabi, the largest of the UAE’s seven emirates.
The new framework is being established so that cryptocurrency firms can operate in the ADGM which is the country’s international center and free zone.
“It [the SCA] reiterated that it does not recognize, regulate, or supervise any ICO presently and that ICO investments are not offered legal or regulatory protection.”
Abu Dhabi’s Financial Services Regulatory Authority (FSRA) is clearly keen to clarify how current guidelines apply to digital currencies in this part of the UAE in line with significant cryptocurrency interest in the region. Consumer protection, safe custody, technology governance, disclosure/transparency and market abuse were cited as important factors of any new regulation and were reported to have been handled by the authority in line with securities exchanges globally.
The outcome designated cryptocurrencies and utility tokens as commodities. Derivatives or crypto- related assets or tokens are to be regulated as “specified Investments” under current FSRA rules. Agency chief Richard Teng was encouraged by the regulatory progress made to date.
“We are encouraged by the significant global and regional interest from exchanges, custodians, intermediaries and other institutions to our crypto spot regulatory framework,” said Teng.
The changes mean that new exchanges will pay an initial authorization fee of USD 125,000 with an annual fee of USD 60.000. Custodial firms will now have to pay a USD 20,000 set up fee with an annual tariff of USD 15,000.
At the end of last year, an ICO policy was published by the FSRA after the government decided that one policy to cover both initial coin offerings and cryptocurrencies was “inappropriate”.
In other UAE emirates, Dubai, with its high-tech society of unmanned trains and Wifi benches, plans to become the first blockchain megalopolis by 2020. Projects underway involve giants Google, Uber, Amazon, and IBM and, due to the initiation of its Smart City program, 545 city projects are underway which have the capacity to change residents lives.
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