The United Arab Emirates (UAE) is set to adopt initial coin offerings (ICOs) for capital markets in 2019, according to reports from Reuters. This comes on the heels of a proposed plan by the government of Dubai to launch a digital currency for citizens.
The CEO of the UAE’s securities watchdog, Obaid Saif al-Zaabi, while commenting on the development stated that ICOs are now considered as securities in the region and plans are on ground to roll out its first set of regulations.
“The board of the Emirates Securities & Commodities Authority has approved considering ICOs as securities. As per our plan, we should have regulations on the ground in the first half of 2019”.
The objective is to provide companies with an innovative model of raising capital, to push to the country’s ailing capital markets and to diversify means companies can employ to raise capital, citing the adverse effect low oil prices and equity markets have been having on Initial Public Offerings (IPOs) in the UAE and Arab Gulf in recent years.
However, Al-Zaabi also added that the ESCA is currently drafting new proposed rules for ICOs in collaboration with international advisers and the Abu Dhabi and Dubai stock markets – which are presently being reviewed by a top minister. He also mentioned a new initiative which seeks to drive women inclusion in traded companies by requiring that 20 percent of those appointed to the boards of listed companies are women.
To facilitate IPOs that will enable family owners to sell all or most of their stakes in the companies they own, a new law may be put in place in 2019. To this Zaabi said, “the Ministry of Economy has written to the prime minister’s office, and we are awaiting approval.”
The ESCA announcement seems to confirm sources which indicated earlier this month that regulatory proposals for ICOs would be formally passed into law in the next UAE’s Official Gazette – an official publication containing all the country’s legislation. The sources also said that the lawmakers are planning to release a regulatory sandbox to attract more fintech activity to the region.
The city of Dubai also announced the launch of its digital currency called Emcash which is expected to be used by consumers as a means of paying for goods and services in the city.. The Emcash will be a stablecoin to be supported by the United Arab Emirates national currency, the dirham.
Also, a point of sale (PoS) payments facility will be put in place in emcredit’s emcash currency as part of the deal with an arm of the Dubai Department of Economic Development, blockchain payment provider Pundi X, and its partner Ebooc Fintech & Loyalty Labs LLC.
“We […] envisage consumers in Dubai being able to make real-time payments using Dubai’s digital currency for all their payment needs for shopping, paying for government fees, etc.,” said Abdalla Al Shamsi, CEO DFP and co-founder of Ebooc commented in the press release.
However, it seems Dubai has established itself as blockchain innovator at the state level, recalling that last year, Dubai international announced plans to employ blockchain technology to develop digital passports that can potentially discard manual checks at their airport. This, coupled with multiple ongoing plans is part of its goal to become a fully blockchain-powered city by 2020.
“Dubai has taken a progressive stance on both cryptocurrency and blockchain regulation in recent years, with the highly-publicized Blockchain Strategy and state-level interest putting the United Arab Emirates considerably ahead of its neighbors in the sector”, according to an excerpt culled from Lt-Gen Dhahi Khalfan Tamim, head of general security in Dubai speaking during a panel.