Dubai Regulator Introduces New Guidelines for Crypto Token Funds

The Dubai Financial Services Authority (DFSA) is taking steps to refine its regulatory framework for cryptocurrency tokens within the Dubai International Financial Centre (DIFC), a key economic zone in the United Arab Emirates (UAE).

Expanding Investment Horizons: Updates in Fund Activity

In response to industry feedback and evolving market dynamics, the DFSA has revised its rules to facilitate both external and domestic funds’ participation in crypto token investments. Previously, restrictions hindered fund activities in this space, prompting calls for a more flexible approach.

The DFSA’s amendments now allow external and domestic funds greater latitude in investing in recognized crypto tokens. Recognizing the importance of innovation, the regulator has also opened avenues for domestic funds to explore investments in unrecognized tokens, albeit within specified limits.

Token Recognition Fees and Stablecoin Standards

In an effort to streamline the recognition process and reduce barriers to entry, the DFSA has adjusted token recognition fees and introduced additional criteria for stablecoins. The move aims to strike a balance between fostering innovation and maintaining regulatory standards, reflecting the DFSA’s commitment to adapt to market needs.

The application fee for token recognition has been halved, addressing concerns over high fees for firms seeking recognition for multiple tokens. Moreover, the introduction of stablecoin criteria underscores the DFSA’s commitment to ensuring compliance and transparency in the burgeoning crypto space.

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