On November 2, the Dubai Financial Services Authority (DFSA) made significant strides in the realm of digital assets by officially recognizing two additional tokens, XRP and Toncoin.
These tokens have now joined the ranks of Bitcoin, Ether, and Litecoin as officially recognized digital currencies within the Dubai International Financial Centre (DIFC).
This recognition brings with it the significant implication that financial institutions operating within the DIFC will be permitted to conduct transactions involving these newly recognized tokens.
The DIFC, a bustling special economic zone, is currently home to over 4,000 companies, making it a pivotal hub for financial activities in the region.
In 2020, Ripple, the company behind XRP, established its MENA headquarters within the DIFC, highlighting the strategic importance of this location.
Ripple, which boasts approximately 20% of its customer base in the MENA region, expressed its enthusiasm for this development.
Ripple’s CEO, Brad Garlinghouse, emphasized the importance of the DFSA’s decision in advancing Dubai’s status as a global financial services hub, fostering foreign investment, and propelling economic growth.
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The DFSA, responsible for regulating the DIFC exclusively, initiated cryptocurrency regulations in October 2021 and further enhanced them in November 2022.
In late September, the DIFC introduced a proposed Digital Assets Law, which also included plans to repeal the existing 2005 Law of Security and the Financial Collateral Regulations.
Instead, the DIFC intends to introduce an updated Law of Security that encompasses collateral regulations in a more comprehensive manner.
This proposed digital assets law outlines the legal attributes of digital assets, their proprietary nature, as well as the protocols for their control, transfer, and handling by relevant parties.
These legal developments are currently undergoing a consultation period, set to conclude on November 5.
These advancements in digital asset regulation come shortly after the Abu Dhabi Global Market’s enactment of the Distributed Ledger Technology (DLT) Foundations Regulations, which became effective on November 1.
Meanwhile, in Dubai itself, the Dubai Virtual Asset Regulatory Authority was established in March 2022, acquiring jurisdiction over the entire emirate and its free trade zones, excluding the DIFC.
This move was accompanied by the introduction of a virtual assets law, signaling Dubai’s commitment to staying at the forefront of the evolving digital asset landscape.
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