Dubai Is the Latest Government To Roll Out Crypto Law, Set Up Regulator

Dubai has revealed its first cryptocurrency legislation, overseen by a new regulatory agency.

“The future belongs to whoever designs it,” Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum wrote in a tweet Wednesday, translated to English. “Today, through the virtual assets law, we seek to participate in the design of this new and rapidly growing global sector. Our step is a leap towards the future aimed at developing this sector and protecting all investors in it.” 

The 56-page proposal, released by the Dubai Financial Services Authority (DFSA) Wednesday, focuses on crypto tokens and follows an October report on digital tokens.

The proposed law focuses on “crypto tokens,” which does not include non-fungible tokens (NFTs), central bank digital currencies (CBDCs) and utility tokens, including play-to-earn gaming tokens with “non-financial” uses.

“We are proposing to exclude NFTs from the scope of our current proposals on the basis there is no Financial Service being provided,” the report said. “However, this comes with a strong caveat that this exemption will depend on the characteristics of the NFT and its function, and not what terminology or marketing terms are used.”

The Dubai Virtual Asset Regulation Law calls for the ban of “privacy tokens,” designed to obscure token holders and trading patterns, and “algorithmic tokens,” which interfere with supply and demand to control price.

The proposal is currently in the public consultation and amendment phase. The next step is to submit it to higher government authorities for approval.

The final version of the law will be made public once it is complete.

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