SECURITY SOLUTIONS

Institutional investors , who seek clarity and protection through regulations , invest in regulated markets .

Additionally , regulatory certainty makes it easier for small firms to seek financing and establish banking relationships and retail investors are more confident when there is government endorsement .

2 . Industry self-regulation

In addition to clear legislation , selfregulating approaches can also be extremely beneficial , especially in high-tech and rapidly advancing industries such as crypto where industry players have much greater expertise than external regulators .

Currently , the UAE ’ s share in the global market is around US $ 25 billion in transactions – with it increasing by 500 % between July 2020 and June 2021 . Regionally , the UAE ranks third by volume , behind Turkey which had US $ 132 billion in transaction volumes and close to Lebanon at US $ 26 billion .

The UAE has been harbouring an encouraging environment for the growth of its crypto industry with Dubai ’ s enactment of the Virtual Assets Law and establishment of the Dubai Virtual Assets

Regulatory Authority ( VARA ), and while the industry was largely unregulated a few years ago , recent legislative measures have shown the government ’ s commitment to reduce the potential financial crime risk in the nascent industry .

1 . Clear regulations

This crucial building block is clear and unambiguous legislation , backed by law enforcement . The UAE requires a comprehensive , all-encompassing framework that covers all Anti-Money Laundering ( AML )/ Combatting the Financing of Terrorism ( CFT ) and financial crime aspects . Niche regulation on areas such as Decentralised Finance ( DeFi ) and Non-Fungible Tokens ( NFT ) is also essential given the luxury real estate and arts market in the UAE , as this will not only help eliminate ML and TF risks but also help to expand the market .

By collaborating with industry experts , FinTechs , crypto firms , academics , consumer interest bodies and subject matter experts , regulators can reduce their monitoring and enforcement costs and encourage greater cooperation and compliance to mutually agreed standards . Added benefits can include advanced training programmes and sharing of insights and research . Selfregulation is proposed as a counterpart to legislation and not as a replacement – it requires the involvement and support of legislators for success .

3 . International coordination and cooperation

As indicated by the IMF , calling for greater international coordination , the Sunrise Issue and borderless nature of crypto can not only cause friction and misalignment but also make compliance difficult for firms , especially where extraterritorial treaties exist . Greater international harmonisation , communication and cooperation is required with other jurisdictions for the UAE to succeed in this last stage of our proposed model . � www . intelligentfin . tech

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