The Dubai International Financial Centre plans to introduce new regulations on digital assets as it seeks to offer investors more security and adopt international standards.
The DIFC plans to enact a digital assets law, a new law of security and amendments to select prevailing regulations to cater to the requirements of the financial centre's proposed digital assets regime, it said on Monday.
The proposed law enactments and amendments aim to ensure DIFC legislations keep pace with the rapid developments in international trade and financial markets arising from technological developments, it said.
They also intend to provide legal certainty for investors and users of digital assets.
“DIFC has been working closely with experts in the field of digital assets and banking and finance to create a global ... digital assets law, and in doing so proposes a significantly enhanced and updated law of security regime,” Jacques Visser, chief legal officer at DIFC, said.
Digital assets, such as cryptocurrencies, NFTs, stablecoins and security tokens, represent a trillion-dollar asset class and the scope for future innovation and market opportunities within it are considerable, DIFC said.
Dubai has been taking steps to regulate the virtual assets market.
It aims to create an advanced legal framework to protect investors and provide international standards for virtual asset industry management to enable responsible business growth.
DIFC's new proposed digital assets law sets out the legal characteristics of a digital asset, its proprietary nature, how it may be controlled, transferred, and dealt with by interested parties.
The proposed new law of security is modelled on the UN Commission on International Trade Law model on secured transactions and it has been adapted to take account of specific factors relating to the DIFC, Mr Visser said.
The proposed legislative changes have been posted for an extended 40-day public consultation period with the deadline for providing comments on November 5. The consultation papers are available on the DIFC legal database.
The DIFC, one of the fastest-growing financial centres in the Middle East, Africa and South Asia region, recorded an increase in FinTech and innovation companies from 599 to 811 in the first half of 2023, up 35 per cent year-on-year.
The centre is now home to 1,443 financial and innovation related companies, a 15 per cent year-on-year growth.