UAE Getting Ready to Embrace Formal ICO and Fintech Regulations
The United Arab Emirates has given consent to a draft of regulations governing ICOs, as reported by local media outlet WAM referring government sources.
The lawmakers in the country are considering adopting certain plans for a regulatory sandbox aimed at promoting increased fintech activity.
As per a report from the Securities and Commodities Authority, the sandbox shall act as an environment that entices innovators to test disruptive business models, products and solutions in a controlled area. They can attain this by embracing a viewpoint of relaxing or waving current regulatory requisites for participants in the sandbox. At the same time, they want to ensure that appropriate safeguards are in place for the protection of end-consumer.
"As per the WAM's report, the Board of Directors has reviewed and considered a study on the best international practices in the matter."
They have issued a directive that the procedures for trading digital assets and cryptocurrencies ought to be regulated. According to the plan developed by SCA, they have included a set of mechanisms as part of a consolidated project for regulating digital tokens. The UAE's Securities and Commodities Authority had approved the plan setting out its suggested framework for regulating cryptocurrencies and digital asset activities, including exchanges, ICOs, and other related commercial units.
The financial regulators of UAE are taking the closing steps for regulating the way that blockchain start-ups are raising money or Initial Coin Offerings, but has also warned of the various risks involved. They are proposing an appropriate regulatory framework which shall recognize virtual tokens as securities.
"The United Arab Emirates has followed a comprehensive policy of fintech integration in past years and have also shown a specific emphasis on blockchain implementation at both the state and municipal level."