More good news for the market from UAE this week, following Dubai’s announcement for public sector blockchain payments. According to a Reuters article, United Arab Emirates regulators will introduce ICOs to provide companies with a fresh way to raise money.
In ICOs, companies issue cryptocurrency tokens to investors, in much the same way as they issue shares in an initial public offer of equity. Since the traditional equity markets are weak lately and the oil prices are hovering low in the last years, IPOs are constrained in the UAE and the Arab Gulf region in general. This turn to cryptocurrencies and the blockchain will benefit its economic growth and paves the way for others countries to follow this approach.
The CEO of National Securities, stated:
“The board of the Emirates Securities & Commodities Authority [ESCA] has approved considering ICOs as securities. As per our plan we should have regulations on the ground in the first half of 2019.”Obaid Saif al-Zaabi
Furthermore, more details will be announced in the future about ESCA setting regulations for ICOs, in cooperation with international advisers and working with the Abu Dhabi and Dubai stock markets to develop trading platforms for the offers. The Ministry of Economy also proposed a new law, according to which, family owners could also make IPOs to sell majority or 100 percent stakes in the companies they control. Approval is still pending from the prime minister’s office.
This could be a big boost for the cryptocurrency market, which is always looking for new investors with its market cap ranging between 200-220 billion dollars in the second half of 2018, from the soaring 800 billion high in January earlier this year.