UAE C4IR and Dubai financial services authority to launch blockchain digital assets sandbox

In a recent article in UAE ” The National” The UAE Centre for the Fourth Industrial Revolution (C4IR UAE) has signed an agreement with the Dubai Financial Services Authority and the Dubai International Financial Centre to provide a test bed for FinTech companies to develop and test the tokenisation of digital assets through blockchain technology. C4IR UAE, a joint venture between the Dubai Future Foundation and the World Economic Forum, said the agreement will provide “a controlled regulatory forum” to test the tokenisation of digital assets.

 

A pilot sandbox will be created based on policy recommendations published in November last year that could lead to the full licensing of companies in the sector. “This collaboration allows us to move one step closer to a fully digital economy,” Khalfan Belhoul, chief executive of the Dubai Future Foundation, said. It also allows for the “adoption of financial solutions that will drive the future of finance and boost Dubai’s overall global competitiveness”, he added.

 

Tokenisation is the process of encrypting data and securely transforming it into a digital asset. It is used to transform the ownership rights of all forms of assets – from cryptocurrencies to properties – into digital tokens. A number of start-ups in Dubai UAE had already started to develop busines models using tokenization, but the sandbox is an attempt to advance the sector’s approach to tokenization according to statements from the three entities involved. 

The pilot sandbox will look to develop frameworks that promote “accessibility, security and transparency” in the financial sector, it added. “The agreement will help our clients which are part of the region’s largest financial centre, harness opportunities to drive the future of finance by embracing digital adoption, supported by enabling regulation,” Arif Amiri, chief executive of the DIFC Authority, said.

 

“By working closely with the C4IR, we seek to drive further growth in the nation’s financial ecosystem, strengthening and accelerating the UAE’s role in the Fourth Industrial Revolution,” Peter Smith, acting chief executive of the Dubai Financial Services Authority, the regulatory body for the DIFC, said. 

Recently DIFC had announced that it would be placing digital asset regulations in its 2021 business plan.