Setting The Regulatory Framework For Digital Assets In The Financial Sector – A Case Study of The United Arab Emirates
DOI:
https://doi.org/10.70301/Keywords:
digital assets, regulatory framework, UAE crypto industry, AML/CFT, ESG considerationsAbstract
Purpose: This study explores some of the benefits that can accrue to the United Arab Emirate’s financial sector if a unified federal-level regulatory framework is set for digital assets.
Design/Method/Approach: A quantitative research approach was utilized in this study. A survey was conducted to collect primary data, which was subsequently analysed using multiple regression analysis, represented by the formula Y = β₀ + β₁X₁ + β₂X₂ + β₃X₃ + β₄X₄ + β₅X₅ + β₆X₆ + ε, where Y denotes regulatory effectiveness and X variables represent AML/CFT controls, cross-border risk management, client protection, licensing efficiency, self-regulation, and ESG considerations respectively.
Findings: The findings in this study show significant benefits associated with implementing a consolidated federal-level regulatory framework, including strengthened AML/CFT controls, improved management of cross-border risks, enhanced client protection, streamlined licensing processes, increased industry self-regulation, and mitigated ESG impacts of crypto mining.
Practical Implications: The study suggests that the rollout of federal level consolidated regulations for Digital Assets in the UAE will foster industry integrity, investor confidence, international cooperation, innovation, and sustainability. The study concludes that establishing a comprehensive federal regulatory framework is crucial for the UAE's crypto industry and recommends actions such as increased international collaboration, continuous regulatory monitoring, targeted educational initiatives, integration of ESG principles, industry partnerships, and regular regulatory reviews to sustain growth and ethical compliance.
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