Abu Dhabi, the capital of the United Arab Emirates, appears set to roll out virtual asset trading as soon as it released a “consultation paper” that suggests guidelines for such trading. The proposals are a step towards integrating digital assets, including non-fungible tokens (NFTs), into the regulatory framework, according to financial experts. The emirate’s financial hub and free zone, Abu Dhabi Global Market, released the document on March 21. The document has more than one page devoted to virtual assets and NFTs.
The document proposes that companies licensed by the free zone financial regulator be allowed to facilitate NFT trading. In it, the free zone’s chief regulator, the Financial Services Regulatory Authority (FSRA), describes NFTs as intellectual property. It also suggests that NFT marketplaces should be run by multilateral trading facilities (MTFs) and “virtual asset custodians”. The document states that transactions in NFTs would require the parties involved to comply with anti-money laundering rules and sanctions.
However, the consultation document makes it clear that ARSF is not proposing a formal regulatory framework for NFTs at this stage.
Authorities have asked stakeholders for their views on the types of NFTs that should be allowed to trade on MTFs, as well as the best approaches to integrating third-party NFT ledgers, until May 20.
Abu Dhabi Global Market is one of the three major economic zones operating in the UAE that host virtual asset service providers. It was the first to publish a regulatory framework for virtual assets in 2018. Last week, another economic zone in the emirate, the Dubai Multi Commodities Centre, granted a crypto license to exchanges FTX and Binance.
Earlier this month, the United Arab Emirates passed its first law to regulate cryptocurrencies and digital assets, including NFTs. Under the new law, the country will create a Dubai Virtual Assets Regulatory Authority (VARA), which will regulate these assets.
Binance has been working for some time to offer its services in West Asia. Recently, it also obtained a crypto service provider license in another Gulf market, Bahrain.