In an attempt to advance investments in capital markets, the country will allow local firms to engage in fundraising via ICOs, as well as using conventional means, such as IPOs.
To be more precise, initial coin offerings will be rendered ‘securities’ in accordance to the legislation, the development of which is currently ongoing and awaits enforcement in the beginning of 2019.
The Emirates Securities and Commodities Authority is preparing a draft law to regulate ICOs. The agency is also cooperating with stock markets of Dubai and Abu Dhabi to help establish the trading networks with a friendly environment for digital currencies and support of coin offerings.
Almost a year ago, Abu Dhabi has presented its instructions on digital currencies and token sales, rendering ICOs as ‘securities’. Digital currencies have been rendered commodities, although they are still not classified as legal tender in the emirate of Abu Dhabi.
According to the report from the ESCA, the IPO market has been severely damaged by both low oil prices and laboring equity markets. This resulted in the struggle faced by local firms seeking to raise funds in the country and the adjacent territories.
Agencies are making efforts to solve the issue by introducing a new legislation that allows family-owned organizations to trade even 100% stakes in their firms with IPOs. Should the draft law obtain approval from the prime minister of the UAE, the legislation will come into force next year.