Dubai Financial Services Authority (DFSA) recently released a consultation paper which includes some core principles that Dubai uses to regulate fintech in the country. With a vision to be a fintech hub, Dubai takes an approach that is “flexible, response, innovative and adaptable”with fintech firms. Dubai’s goal is to set up a testing environment for the fintech companies to ensure that the products’ users are protected. Other than this, regulations are supposed to be minimal, and the DFSA should only regulate if needed. Dubai set a group of criteria that the fintech companies need to meet in order to get a testing license. Basically, these criteria ensures that the company who participate are truly financial technology companies. For example, it requires that the companies who sign up for the testing must involve the use of financial technology and must involve financial services that are currently regulated by the DFSA. Once a firm is granted a testing license, it will be able to test its fintech product with customers under a set of rules posed by the DFSA. After the product passes the test, it will receive a full Financial Service License.
Personally, I strongly agree with the approach that Dubai takes to regulate Fintech. As I mentioned in previous blogs, regulations are definitely needed in fintech, not to suppress its development, but to ensure the interest of customers. Good regulations can both create a environment that encourages fintech innovation, and protect customers from abuses. DFSA’s approach has definitely set up a standard for the rest of the world.
Source: https://www.cryptocoinsnews.com/dubai-financial-regulator-reveals-fintech-regulatory-approach/