As cryptocurrencies and tokenized securities become more and more popular, governments around the world are scrambling to come up with regulatory policies that are both fair and effective.
Several nations, such as Malta and Gibraltar have taken very favourable regulatory stances on cryptocurrencies and crypto-related projects. This has seen them become something of a haven for crypto-companies looking for a home base.
Another nation that aims to become a hub of crypto-activity is the UAE. Regulators in this country have announced that they will have concrete legal frameworks for initial coin offerings by mid-2019. While these regulations have not arrived yet, many are optimistic that they will help to provide a clear, fair, and equitable environment for both ICO (initial coin offering) and STO (security token offering) projects.
Other Positive Signs in the UAE
Many crypto companies have faced enormous difficulty in growing and scaling due to regulatory concerns. So, if the UAE is able to provide a safe harbour for crypto startups, then it could bring in a flood of crypto business to the nation.
There are other positive signs that are happening in the nation too, right now that indicate that the UAE is turning into a highly crypto-supportive nation. For example, the country is already opening up crypto licensing and registration to companies from around the world.
Further, the UAE is also partnering with its neighbour, Saudi Arabia, to develop a cryptocurrency that can be used in cross-border transactions. This is extremely significant as it is one of the first examples of large nations working together to create a cryptocurrency for mutual benefit.
Creating a Solid Crypto Regulatory Foundation
It is clear that the UAE is becoming increasingly proactive and positive about cryptocurrencies and tokenized securities. Part of the reason why this is the case is that the government sees the potential of the crypto sector.
However, the government is also well aware of the fact that financial crime involving cryptocurrencies is a major problem. This is why it wants strong crypto regulations.
It appears that the ICO and STO regulations in the UAE are soon to be settled. This is something that many crypto companies and crypto enthusiasts will be eagerly anticipating. Regulatory uncertainty often leads to market downturns, so, hopefully, regulatory certainty regarding ICOs and STOs in UAE will lead to a major market upturn and help to cement the UAE’s place as a crypto hub.