Abu Dhabi, the capital of the United Arab Emirates (UAE), is all set to trade in virtual assets as the country has released a ‘consultation paper’ for trade guidelines. Financial experts have initiated steps to bring digital assets such as non-fungible tokens (NFTs) under the directory framework. The Free Zone Company and financial hub of Emirates, Abu Dhabi Global Market, released the consultation paper on 21st March, 2022. The paper has more than a page dedicated to NFTs and other virtual assets.
The document proposes that companies holding the license from the financial regulator of a free zone are allowed to do NFT trading. The chief regulator of a free zone, the Financial Services Regulatory Authority (FSRA), describes NFTs and digital assets as intellectual property in the proposal papers.
Moreover, it also suggests that virtual asset custodians and multilateral trading facilities (MTFs) can run the NFT marketplaces. In addition, NFT’s transaction will require parties’ involvement to meet the terms of sanction rules and anti-money laundering.
However, the documents are also clear that at this point, FSRA is not offering a formal regulatory context for NFTs.
Authorities have asked for opinions from stakeholders about the sorts of NFTs that are allowed to trade on MTFs, also the tactics to incorporate the involvement of third parties.
Abu Dhabi- Primary Economic Zone
Abu Dhabi Global Market is the primary economic zone in the UAE with service providers for a virtual asset. In 2018, it became the first to release a regulatory framework for digital assets. In comparison, in the last week of March, the Dubai Multi Commodities Center, another emirate’s economic zone, granted a crypto license for Binance exchange and FTX.
The UAE has also adopted the first law to regulate cryptocurrencies and virtual assets such as NFTs. According to the new law, the UAE will set up a Dubai Virtual Assets Regulatory Authority (VARA) to regulate the assets.
Furthermore, Giants like Binance have been offering their services in West Asia. Recently it has got a license for a crypto service provider in the Gulf market of Bahrain.
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