Abu Dhabi Introduces Regulatory Framework for Trade in NFTs

Abu Dhabi is ready to introduce regulatory framework for trade in NFTs

Abu Dhabi, the capital of the United Arab Emirates, appears to be conducting virtual asset trading once it has released a “consultation document” proposing guidelines for such trading. The proposals are a step towards bringing the digital assets, including the non-fungible tokens (NFTs), under the regulatory framework, say financial experts. The emirate’s financial center and free zone, Abu Dhabi Global Market, released the newspaper on March 21. The document has more than one page dedicated to virtual assets and NFTs.

The paper proposes that companies licensed by the free zone financial regulator be allowed to facilitate NFT trading. In it, the free zone’s chief regulator, the Financial Services Regulatory Authority (FSRA), describes NFTs as intellectual property. It also suggests that NFT marketplaces be managed by multilateral trading facilities (MTFs) and “virtual asset keepers”. The newspaper says that transactions in NFTs will require the parties involved to comply with the anti-money laundering and sanctions rules.

However, the consultation document makes it clear that FSRA does not currently propose a formal regulatory framework for NFTs.

Authorities have asked stakeholders to give their views on what kind of NFTs should be allowed to trade on MTFs, as well as the best approaches to include third-party NFT registers, by May 20th.

Abu Dhabi Global Market is one of the three major economic zones operating in the UAE that houses virtual asset service providers. It was the first to release a regulatory framework for virtual assets in 2018. Last week, another economic zone of the emirate, the Dubai Multi Commodities Center, granted a crypto-license to FTX and Binance exchanges.

Earlier this month, the UAE passed its first law to regulate cryptocurrencies and digital assets, including the NFTs. Under the new law, the country will establish a Dubai Virtual Assets Regulatory Authority (VARA) that will regulate these assets.

Binance has been working for some time to offer its services in West Asia. Recently, it also obtained a crypto service provider license in another Gulf market, Bahrain.

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