As the emirate’s acceptance of such investments grows, the Dubai World Trade Centre will become a complete zone and regulator for virtual assets and cryptocurrencies, encompassing digital assets, goods, operators, and exchanges.
The government would also develop a complete ecosystem for the industry, according to the Dubai Media Office on Monday. The action is consistent with the government’s goals to develop new sectors of the economy and increase financial inclusion.
The DWTC will collaborate with the commercial sector. It will enforce strict investor protection requirements, combat money laundering and terrorism funding, and track cross-border transactions involving virtual assets and cryptocurrencies.
“The move strengthens Dubai’s position as a premier worldwide centre for business, commerce, and technology. The World Trade Centre would create and manage a new world-class regulatory framework for virtual asset legislation and enforcement policies “authorities said
It “will be important to enabling and expanding cross-border operations and ecosystem innovation in order to ensure safe market adoption and growth for this industry in Dubai.”
The DWTC announcement is consistent with the UAE’s objectives to assist banks and other financial institutions in adopting new-age technology and managing any risks associated with their implementation.
Investor interest in digital tokens and cryptocurrencies has increased in the aftermath of the Covid-19 outbreak, as homebound users hunt for ways to spend their extra income. At least half of the institutional investors in the UAE polled this year by London-based Nickel Digital Asset Management stated they want to significantly increase their exposure to digital assets between now and 2023.
The UAE Central Bank does not accept or recognize any cryptocurrency in the country, where the dirham is the only legal money.
However, free zones in Dubai and Abu Dhabi have developed an advanced structure to attract crypto entrepreneurs to set up exchanges while also setting out guidelines to safeguard consumers.
Abu Dhabi Global Market announced last month that it has three operational cryptocurrency exchanges, with three more in various stages of preparation for a soft launch, as it seeks to expand online asset trading options for investors, according to Emmanuel Givanakis, chief executive of its Financial Services Regulatory Authority.
Last month, UAE financial sector regulators and financial free zones announced recommendations to assist financial institutions in securely adopting enabling technology. The Central Bank of the UAE, the Securities and Commodities Authority, the Dubai Financial Services Authority of the Dubai International Financial Centre, and the FSRA of ADGM all launched them.
According to millionaire blockchain technology pioneer Brock Pierce, the use of digital financial instruments can also help bridge the digital divide and improve financial inclusion.
The DWTC intends to enhance Dubai’s virtual assets and markets, notably by broadening its environment for financial products and embracing new trends based on innovative underpinning blockchain technology, such as cryptocurrencies and non-fungible tokens.
According to CoinMarketCap, the global cryptocurrency industry is still strong, with a market valuation of more than $2.14 trillion as of Monday.
Last week, the international market for NFTs — a sort of crypto asset that utilises blockchain to record the ownership status of digital items, with only its buyers having the verified status of being owners – reached $22 billion, aided by the burgeoning collector mania.