The UAE Securities and Commodities Authority signed a deal with the Dubai World Trade Centre Authority to support trading of crypto assets in the free zone as the UAE continues to develop its digital economy.
The agreement will allow the DWTCA to issue approvals and licences for crypto asset-related financial activities, the Dubai authority said in a statement on Wednesday.
“The SCA will be responsible for the regulatory supervision of offering, issuing, trading and listing crypto assets and the licensing of financial activities related to them within the limits of the DWTCA free zone,” Maryam Al Suwaidi, acting chief executive of the SCA, said.
The SCA will support and inspect the licensed entities that operate within the free zone, said Helal Saeed Almarri, director general of the DWTCA. It will also carry out any investigations required.
“Our agreement with the Securities and Commodities Authority will allow [the] DWTCA to broaden its regulatory, licences and services capabilities, in addition to extending the centralised supervision of the crypto market to our free zone,” Mr Almarri said.
The SCA, which is responsible for monitoring and regulating the UAE’s financial markets, aims to build a sustainable investment environment and safeguard the rights of investors, promote sound practices and create a framework to attract capital using innovative systems.
The DWTCA said it is looking at blockchain and cryptographic technology companies to set up base in the free zone to support the UAE push towards a digital economic transformation.
The digital economy contributes about Dh100 billion ($27.25bn) and accounts for 4.3 per cent of the UAE's gross domestic product.
There are more than 1,400 start-ups in the country with a total estimated value of Dh90bn. More than 90 investment funds and 12 business incubators are also supporting the country's digital sector, according to government data.
“With the rise of new technologies such as non-fungible tokens set to play an important role in the future of commerce, the DWTCA is pursuing ways to offer a sustainable home for this ecosystem,” Mr Almarri said.