The United Arab Emirates (UAE) is finally pushing forward with strategies to present initial coin offerings (ICOs) as method toward fundraising for companies and startups in 2019.
As part of an attempt to promote solutions to financing in capital markets, the UAE will permit home-based businesses to generate funding by offering cryptocurrency tokens to investors alongside conventional ways like shares issued in an initial public offering (IPO), it was reported that ICOs will be regarded as ‘securities’ by authorities under regulations, at this time in draft, which will be enforced early in 2019.
Engaging at a conference, UAE securities market watchdog chief Omar Saif al-Zaabi said:
“The board of the Emirates Securities & Commodities Authority [ESCA] has recommended taking a look at ICOs as securities. Given our plan, we ought to have regulations on the ground in the first half of 2019.”
The ESCA is currently drafting ICO guidelines with unnamed deliberate advisers. The watchdog is notably working alongside Abu Dhabi and Dubai stock markets to develop crypto-friendly trading systems to support ICOs, the official added.
Nearly a year ago to the day, Abu Dhabi – the UAE’s largest emirate – introduced guidelines on cryptocurrencies and ICOs, the latter as ‘securities’. Cryptocurrencies, while not classified as legal tender, are considered commodities by the government of Abu Dhabi.
The statement indicates that a mix of low oil prices and laboring equity markets over several years has ‘severely’ dented IPOs, dealing a blow for domestic businesses looking to raise finances in the UAE and wider Gulf region.
Authorities are using several techniques to get a clearer view, with a new law that enables locally-owned businesses to sell a majority of even 100