Effective today, the Dubai Financial Services Authority (DFSA) has updated its crypto rules and provided guidance on stablecoins that are usable within the Dubai International Financial Centre (DIFC).
The biggest change on the crypto front is that tokens will no longer be assessed individually by the regulator, a somewhat time-consuming process that could also imply unintended endorsement. Instead, it has provided a list of criteria for eligible tokens. This is similar to the model adopted in Abu Dhabi’s ADGM. Other DFSA crypto changes include a ban on privacy tokens and new provisions regarding asset management and crypto funds.
On the stablecoin front, to date the DFSA has only recognized Circle’s USDC and EURC, as well as Ripple’s RLUSD. The DFSA recognizes rather than licensing stablecoins. Previous rules made it clear that fiat crypto tokens excluded algorithmic stablecoins. Other significant stablecoins such as Sky and DAI are not algorithmic, but their reserves include significant crypto and private credit holdings. Hence, today’s policy statement clarifies that eligible stablecoins must have reserves that “are denominated in the reference currency”.
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