SCA rolls out new draft law for DLT transactions: The UAE Securities and Commodities Authority (SCA) rolled out a draft regulation (pdf) for security and commodity tokens based on distributed ledger technology (DLT). This regulation aims to establish a legislative framework for the issuance and trading of tokenized assets in the UAE. The consultation period for industry stakeholders will end on 14 February 2025, Al Khaleej reports.

Sound smart: DLT is a system that records transactions across multiple locations without a central authority. Each participant keeps a copy of the ledger, and transactions are verified by the network to ensure accuracy and security, with blockchain being an example.

The draft regulation sets out rules and guidance for contracts between creditors and their obligors on a DLT, including the transfer and cancellation of tokens, and gives the SCA authority to penalize violators of the regulation and to publish their names.

The UAE has been working on its virtual asset regulations: In Abu Dhabi, the Financial Services Regulatory Authority issued a consultation paper proposing updated rules to its virtual asset regulatory framework. The FSRA also issued a regulatory framework for the issuance of stablecoins in the ADGM earlier this month, while the Dubai Financial Services Authority amended its crypto token regime earlier last year, offering more flexible regulations for investing in unrecognized crypto tokens, reduce fees on investments, and implement more stringent anti-money laundering rules.

Tags: