The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) released tailored regulations for the crypto industry, the Distributed Ledger Technology (DLT) Foundations Regulations 2023, on November 2, according to a press release.
The new rules aim to provide much-needed regulatory clarity to the crypto industry and position Abu Dhabi as the second crypto hub in the UAE, alongside Dubai.
Ahmed Jasim Al Zaabi, Chairman of ADGM, highlighted Abu Dhabi’s rapid transformation into a hub for digital asset innovators and its continued commitment to nurturing an ecosystem that fosters technological advancement.
This move underlines the UAE’s commitment to positioning itself at the forefront of digital innovation.
DLT Foundations regulations
The new regulatory framework addresses the specific regulatory requirements of Blockchain Foundations, Decentralized Autonomous Organizations (DAOs) and the broader crypto industry.
The framework has been developed following an extensive consultation process with key industry stakeholders to ensure it captures valuable feedback and increases its applicability. It provides a unified solution for the needs of digital asset-related activities, while also taking into account the broader Foundations landscape.
Under the new regime, DAOs and other digital ledger entities can legally operate in the emirate and issue tokens to their members.
Crypto hub ambitions
ADGMs also provides significant benefits to the broader Web3 community. By promoting better governance and recognizing the decentralized principles inherent in this sector, Abu Dhabi is setting a precedent for international financial centers.
The emirate is actively competing to brand itself as a cryptocurrency hub and is aligning its efforts with Dubai’s initiatives to embrace the digital asset sector.
The regulatory framework in Abu Dhabi offers an attractive option for companies looking for clear and reliable regulations that differ from those in other parts of the world.
Dubai has a significant lead over Abu Dhabi when it comes to regulating cryptocurrencies, with most aspects of the sector now under the supervision of financial watchdogs. The emirate has been into digital assets for several years and has established an economic free zone for digital and virtual asset service providers.
The zone includes emerging technologies such as the metaverse, blockchain, utility tokens, virtual asset wallets, non-fungible tokens, DAOs, decentralized applications, and other Web3-related businesses.