The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) unveiled tailored regulations for the cryptocurrency sector, officially known as the Distributed Ledger Technology (DLT) Foundations Regulations 2023, on November 2nd, as announced in a press release.
These fresh regulations are designed to offer much-needed clarity and oversight to the cryptocurrency industry, positioning Abu Dhabi as a prominent cryptocurrency hub within the United Arab Emirates, in close competition with Dubai.
Ahmed Jasim Al Zaabi, the Chairman of ADGM, underscored Abu Dhabi’s swift evolution into a hub for digital asset innovators and its unwavering dedication to fostering an ecosystem conducive to technological advancement.
This strategic move underscores the UAE’s firm commitment to establishing itself at the forefront of digital innovation.
The DLT Foundations Regulations are a comprehensive regulatory framework that addresses the specific legal requirements of Blockchain Foundations, Decentralized Autonomous Organizations (DAOs), and the broader cryptocurrency industry. The framework was meticulously developed through an extensive consultation process involving key industry stakeholders to ensure it incorporates valuable feedback and maximizes its practicality. It offers a unified solution tailored to the needs of digital asset-related activities while also taking into account the broader landscape of Foundations.
Under the new regulatory framework, DAOs and other digital ledger entities can operate within the Emirate under a legal framework and issue tokens to their members.
ADGM’s initiatives extend significant benefits to the broader Web3 community by promoting enhanced governance and recognizing the decentralized principles that underpin this sector. Abu Dhabi is setting a precedent for international financial hubs as it actively competes to establish itself as a cryptocurrency hub, aligning its efforts with Dubai’s initiatives to embrace the digital asset sector.
Abu Dhabi’s regulatory framework presents an appealing option for companies seeking clear and reliable regulations that distinguish it from other global jurisdictions.
It’s important to note that Dubai currently holds a substantial lead over Abu Dhabi in terms of cryptocurrency regulation, with most facets of the industry being overseen by financial regulatory authorities. The Emirate has been actively involved in the digital asset space for several years now and has established an economic free zone dedicated to digital and virtual asset service providers. This free zone encompasses emerging technologies such as the metaverse, blockchain, utility tokens, virtual asset wallets, non-fungible tokens, DAOs, decentralized applications, and other Web3-related businesses.