Regulator from UAE Calls for Increased Regulatory Action on Cryptos

One of the things that make the crypto market risky is the fact that there are still parts of the world wherein it isn’t regulated. And though there are regulatory efforts, different countries have different approaches. You have China that banned crypto-related activities while you have a country like Malta that has become a safe haven for blockchain related businesses.

During this week’s Fintech Abu Dhabi event, Richard Teng who works as the head of the Financial Services Regulatory Authority of the Abu Dhabi Global Market (ADGM) thinks that it is time that the space should be regulated. He said that “This space needs to be properly regulated, otherwise there is the risk of financial crime”.

Concerns Over Theft

Hacking incidences have become rampant in the industry over the years. Mt. Gox and Coincheck are among high profile cases that rocked the industry. According to  Teng, “Every time a coin gets stolen or lost, it affects the confidence in this asset class”.

It has been reported that formal regulations are emerging at a nationwide level in the UAE. It hopes to address both fintech and Initial Coin Offerings (ICO). According to a report coming from the Securities and Commodities Authority (SCA) published earlier this month, “The sandbox will act as an environment that attracts innovators to test innovative products, services, solutions and business models in a controlled space”.

It also added that “This can be achieved by adopting an approach of relaxing and/or waving regulatory requirements for participants in the sandbox, while at the same time, ensuring that appropriate consumer protection safeguards are in place”.

Can Crypto Replace Cash?

This week, Dubai police chief mentioned that it is possible that digital currency can “soon replace” traditional cash. On the other hand, there are those law enforcement officials that have called for the central bank to intervene and issue a national cryptocurrency.

A national cryptocurrency isn’t a new idea at all. Iran and Venezuela have both worked on this idea of having a national cryptocurrency. In most occasions, the reason for having a nationalized cryptocurrency is to save the country from economic problems including US sanctions.

Address Regulatory Issues Sooner Than Later

Teng mentioned that “we are confident that our comprehensive regime—which we have shared with global regulators… can address these risks and bring greater confidence into this asset class”.

Teng has engaged within the crypto market for quite some time now. He was able to share his experience with different governments including that of the US Securities, Monetary Authority of Singapore, and Exchange Commission and the UK’s Financial Conduct Authority.

Crypto regulations are happening all over the world today. In fact, many believe that crypto regulations is a must not only to protect the investors but to also improve the overall climate of the crypto market. There are also those who believe that regulatory clarity is key in order to get institutional investors at play.

Though there are already institutional investors that are looking forward to enter the market, many are still yet to fully commit towards the idea of injecting a large sum of capital into the market.