The United Arab Emirates (UAE) are set to become among the first countries to have a comprehensive set of regulatory guidelines surrounding the Initial Coin Offering (ICO). By 2019, ICOs are to be officially allowed and regulated, and the country further intends to use the investment model as a form of corporate fundraising attributed primarily to the decline in the price of oil.
The initial coin offering regulated by 2019?
As reported by Reuters, the initial coin offering model is being pushed forward in the UAE, primarily to boost the capital markets industry. The UAE is heavily dependent on oil and has been hit hard by the recent slump. The IPO industry in the country has been failing and companies are finding it difficult to find revenue. The problem is compounded with a weak equity market in the Gulf region as a whole. Speaking on the matter, the UAE Securities chief executive Omar Saif al-Zaab reported that –
“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 UAE has sought aid from other countries in a bid to integrate DLT and the initial coin offering into the country. The Emirates Securities and Commodities Authority (ESCA) is currently drafting regulations for the ICOs with international advisors. The news comes at around the same time that the European Union announced it would be regulating ICOs on a case by case basis, implying that a framework should be in place by 2019. Other countries such as Malta and the Philippines are drafting and enforcing ICO regulatory policies.
The UAE – A blockchain haven
While many countries are pushing forward with DLT, the UAE is one of the most pro-blockchain nations at the government level, with a wide variety of initiatives in place. Dubai is seeking to create the worlds first passport-free airport using a combination of DLT and biometric scanning. To achieve this, it has a contract in place with UK-based blockchain startup, Object Tech.
Dubai aims to become the world’s first government powered fully by blockchain. In October, it launched emCash to pay for government services, such as visas, school fees, and passports. It is currently working to migrate all governmental paperwork to the blockchain, a move that is estimated to save significant amounts. And there is already significant adoption of cryptocurrency in the real-estate sector, where it is relatively common to purchase apartments using Bitcoin and other cryptocurrencies.
The UAE central bank is also working on a DLT project for cross-border transactions in tandem with the Saudi Arabian Monetary Authority to issue a digital currency. Additionally, the National Bank of Abu Dhabi announced in June that it would be using Ripple as a cross-border settlement system. It is very rare that the central bank, commercial banks, government departments, private enterprise, and individual persons are all on board with distributed ledger technology within a single nation.