News
Dubai Financial Authority updates rules on crypto tokens
The Dubai Financial Services Authority (DFSA) has updated its cryptocurrency token regime to improve and simplify the regulation of tokens within its special economic zone. The changes allow external and domestic funds to invest in recognized crypto tokens, addressing previous restrictions deemed too stringent by funds and asset managers.
DFSA reduced token recognition fees from $10,000 to $5,000 introduced additional criteria for stablecoins, ensuring flexibility while maintaining robust regulatory standards.
Source: Dubai Financial Services Authority
Reason for implementation
The revisions arise from feedback on Consultation Document 153, released in January 2024. Fund managers pointed out that previous regulations were overly restrictive, particularly regarding external and foreign funds investing in crypto tokens.
By relaxing these rules, the DFSA aims to promote innovation in a responsible way, balancing regulatory objectives with the need for market adaptability.
Impact on investors
With these changes, qualified domestic investors can invest in unrecognized cryptocurrencies, but such investment will not exceed 10% of the fund’s net asset value.
These changes can be attributed to the ongoing measures that the DFSA has carried out to improve the legal infrastructure for regulation and development of the investment climate.
Furthermore, the improvements made by the DFSA are expected to lead to increased investment activity in the Dubai International Financial Center and improved innovation and compliance with regulatory requirements.
Read also: Argentina, El Salvador Explore Bitcoin Regulations