DFSA Launches Regulatory Framwork for Investment Tokens

The Dubai Financial Services Authority (DFSA), which oversees financial firms operating from the Dubai International Financial Centre (DIFC), has announced the launch of its regulatory framework for investment tokens, which are defined as either security tokens or derivative tokens.

According to the press release, the Investment Tokens regulatory framework applies to persons interested to market, issue, trade or hold Investment Tokens in or from the Dubai International Financial Centre (DIFC) and authorised firms wishing to undertake Financial Services relating to Investment Tokens.

DFSA mentioned that it is drawing up proposals for tokens not covered by the Investment Tokens regulatory framework. These are expected to cover exchange tokens (also known as cryptocurrencies), utility tokens and certain asset-backed tokens (stablecoins). The DFSA intends to issue a second consultation paper later in Q4.

”Our consultation on investment tokens enabled us to understand what firms were looking for in a regulatory framework and introduce a regime that is relevant to the market. We look forward to receiving applications from interested firms and contributing to the ongoing growth of future-focused financial services in the DIFC,”Peter Smith, Managing Director, Head of Strategy, Policy and Risk at the DFSA said.

Earlier this year, DFSA has appointed F. Christopher Calabia as New Chief Executive​. Calabia replaced Bryan Stirewalt with effect from 1 October 2021.