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Revised Crypto Token Regulations in Dubai

Jun 4, 2024

The Dubai Financial Services Authority (DFSA) has announced revisions to its regulations governing crypto tokens within the Dubai International Financial Centre (DIFC), signaling a shift towards a more accommodative legal environment for tokens in the special economic zone. Following feedback from stakeholders and consultation, the DFSA updated its crypto token regime, giving attention to critical areas such as the recognition process for crypto tokens and the facilitation of fund investments in them. Previously, the DFSA banned fund activities involving crypto tokens, but the recent changes have reversed this stance. The amendments now allow international and external funds to offer units investing in identified cryptocurrency tokens. Moreover, domestic qualified investment funds can now allocate resources to unrecognized tokens, subject to specified conditions. The DFSA has recognized only five cryptocurrency tokens - Bitcoin, Ethereum, Litecoin, XRP, and Toncoin - since the regime's inception. In response to concerns about the token recognition application fee, the DFSA decreased it from $10,000 to $5,000, making the process more accessible for companies seeking recognition for multiple tokens. Additionally, the regulator introduced new criteria for stablecoins to strengthen oversight and regulation within the DIFC.

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