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On Sunday March 17, the state-sponsored Emirates News Agency announced that UAE Banks Federation (UBF) and Abu Dhabi Global Market (ADGM) have hosted a joint forum together to discuss FinTech and crypto assets.
The event discussed a range of topics including ADGM’s regulations and supervisory approach to digital assets and big data, and how machine learning can be used to improve surveillance and management of financial transactions.
The press release states:
“In light of technology innovation such as cryptocurrencies and other digital assets, the financial services sector is undergoing a dramatic transformation unlike any other industry. These fast-evolving market dynamics mean that banks, financial institutions as well as financial regulators have an important part to play to diligently monitor and keep abreast of such developments, and ensure financial services continue to operate in a robust and trusted way in an increasingly digital environment.”
These types of events can inspire conflicting opinions within the crypto industry – on the one hand, we want cryptocurrency to be more widely recognized by mainstream user-base for the benefits it provides that traditional banking lacks. Major banks are choosing to collaborate with cryptocurrency ventures that can help push crypto into the mainstream and bring it to an entirely new audience. On the other hand, cryptocurrency, namely Bitcoin, was created as an alternative to banks and regulators – a way for the people to gain control back from the institutions.
AbdulAziz Al-Ghurair, Chairman of UAE Banks Federation, said:
“This event highlighted the importance and power of collaboration between regulatory authorities and financial institutions in building the trust and commitment needed to introduce FinTech activities securely into the financial services sector.”
Some crypto enthusiasts are concerned that the financial regulators are pledging their support to crypto for the wrong reasons. It is clear that digital currency isn’t going anywhere, it continues to grow in popularity year on year with new crypto coins coming onto the market, new startups being made, or through collaborations with well-established companies. Even the governments of the United Arab Emirates and Saudi Arabia collaborate in order to launch a cryptocurrency of their own.
It could be argued that financial regulators and banks are recognizing crypto because they have to, but that they are going to turn it into something it was never meant to be. That isn’t to say that there is no room for regulation within crypto, there is, but most crypto proponents don’t want legacy bank regulation in the industry either.
But then many argue that the above is a cynical view. Maybe we can work with the banks and regulators to find a middle ground where everyone is happy.