Security token offerings (STOs) are becoming a trend in the cryptocurrency industry because of the unique regulatory advantages that it has over ICOs. To this end, more countries are generally open to welcoming STOs as they come to limelight.
According to Jason King, a managing partner of the Dubai-based firm, Connected Global Strategies (CGS), the country’s regulators have already paved the way for STOs to thrive in the region by creating a regulatory framework for STOs.
Jason told crypto news publication, CryptoBriefing that Dubai Financial Services Authority (DFSA) has developed these regulations “under the radar.” He said that this stance was taken by the agency because they “see it as inevitable that cryptocurrencies and blockchain will experience mass-adoption,” therefore bringing the industry under control right now is a priority for them.
Given that Dubai already has a booming financial sector and a vast real estate market, the idea of tokenizing company assets into securities for fundraising activities will go down well with businesses in the city according to King.
Dubai’s Stance on Blockchain, Cryptocurrencies and ICOs
To date, the government of the emirate city of Dubai is yet to announce a clear-cut regulatory framework for the new industry. The DFSA, however, did issue an investor protection notice that described ICOs as “high-risk investment” and urged residents to take extra care before putting money into a project.
Despite this cold stance on cryptocurrencies, Dubai has embraced the underlying technology, blockchain. The government launched the Dubai Blockchain Strategy earlier this year and had sights set on making "Dubai the first city fully powered by Blockchain by 2020".
On the crypto exchange front, we earlier reported this month that the city had welcomed its first regulated crypto exchange known as the Crypto Bulls Exchange.
With a favorable outlook on blockchain and cryptocurrencies, it will be a little surprise to see Dubai move to provide regulatory cover for the new industry. They have had their fair share of oil money and with technology defined as the ‘new oil,’ the city could be ideally placed to achieve fame in both the “old and new oil.”