DAFZA unites with SCA to support crypto assets trading within freezone

By Ashika Rajan, Trainee Reporter
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The Dubai Airport Freezone Authority (DAFZA) has signed an agreement with the  UAE’s Securities and Commodities Authority (SCA) to support the regulation, offering, issuance, listing, and trading of crypto assets within the freezone.

Dr. Maryam Al Suwaidi, Acting CEO of the Securities and Commodities Authority, and Ms. Amna Lootah, Assistant Director-General of DAFZA, signed the agreement.

The new agreement allows companies trading in crypto assets cryptocurrencies to be licensed within DAFZA, with the SCA granting the necessary permissions and licenses.

DAFZA has extended its business licenses and commercial activities as a result of this agreement, which will be integrated with the freezone’s incentives and services. It will also offer a well-developed regulatory framework and a flexible legislative environment that will improve the experience of foreign investors.

The SCA, in collaboration with DAFZA, oversees the offering, issuance, listing, and trading of crypto assets, as well as licensing associated financial operations under DAFZA’s jurisdiction.

The agreement also states that the authority is responsible for supervising, controlling, inspecting, and investigating organizations that operate in DAFZA and have obtained a license or approval from the authority as a result of the agreement.

The deal will help to boost the cryptocurrency sector’s growth and improve the usage of blockchain in Dubai and the UAE and will be a key component of the UAE’s blockchain strategy.

As a result, the two parties will share their best practices, experiences, and technical assistance to improve their understanding of existing financial systems.

Dr. Maryam Al-Suwaidi remarked that “the signing of the agreement confirms the two parties’ keenness to develop its cooperation in common areas of work, which contributes to achieving the objectives of the national agenda and the government’s strategy to enhance economic growth. Under the directives of Mr. Abdullah bin Touq, Minister of Economy and Chairman of the Board of Directors of the Securities and Commodities Authority, we aim to strengthen our collaborations and exchange experiences and knowledge with various government entities, agencies, and institutions, and work as a team to achieve our common goals,”

Ms. Amna Lootah pointed out that “DAFZA is continuously working to attract foreign investors through expanding the scope of its licenses and services. The free zone has more than 25 years of high confidence and trust within the international business community, which is looking to establish or expand its business and commercial activities in DAFZA. Cryptocurrencies and crypto assets have moved from the stage of showing interest to direct investment, which has got acceptance and investments from key global companies. This will require us to keep pace with this transformation and to follow the new economic era. The UAE and the emirate of Dubai have also confirmed its commitment to blockchain technology through several strategic plans and initiatives that highlight the importance of this sector.”

As worldwide trade volumes for crypto-assets continue to rise, demand for cryptocurrencies and crypto-assets is expected to increase fast in the UAE and other GCC nations shortly. Cryptocurrencies have fueled demand for real estate investments as early adopter investors who grew rich from digital currency look to diversify their assets.

“The terms included in the agreement are set to establish a strategic partnership, which allows the provision of distinguished professional services while specifying the responsibilities and obligations of each of the two parties. It also provides reliable and timely support to each party regarding any matters falling within the scope of this agreement and sharing the best practices of relevant markets. This initiative supports both entities to achieve its strategic and organizational goals. It aims to exchange technical support to enhance the ability of the two parties to mutual understanding and familiarity with the financial systems both entities use,” Dr. Maryam Al-Suwaidi concluded.

Related: DAFZA’s non-oil foreign trade hit $32bn in 2020