Dubai Financial Regulator Updates Crypto Regulations

The Dubai Financial Services Authority (DFSA) has revised its crypto token regulations to strengthen the regulatory framework at the Dubai International Financial Center (DIFC).

The new rules refer to the investment restrictions for both foreign and domestic crypto-token funds, with the aim of easing previous restrictions that were considered too restrictive by fund managers.

Key changes include allowing the funds of domestic qualified investors to invest in unrecognized tokens, provided that such investments do not exceed 10% of the fund's gross asset value. This change comes after the DFSA noted the need for more flexibility in its approach.

In response to concerns about high costs, the DFSA halved the token recognition application fee from $10,000 to $5,000 and added criteria for recognizing stablecoins, stressing that this was not a regulatory relief but a tweak for better flexibility.

DFSA chief executive Ian Johnston stressed that the updates were designed to encourage responsible innovation while maintaining regulatory standards. Over the past two years, the DFSA has engaged with numerous firms to understand market needs and adapt its regulatory approach accordingly.

These changes reflect the DFSA's ongoing efforts to adapt to market developments and international standards, ensuring that the DIFC remains a leading financial centre.