The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) released tailor-made rules for the crypto industry called the Distributed Ledger Technology (DLT) Foundations Regulations 2023 on Nov. 2, according to a press release.
The new rules aim to provide the crypto industry with much-needed regulatory clarity and position Abu Dhabi as the second crypto hub in the UAE, alongside Dubai.
Ahmed Jasim Al Zaabi, the Chairman of ADGM, emphasized Abu Dhabi’s rapid transformation into a hub for digital asset innovators and its unwavering commitment to nurturing an ecosystem that fosters technological progress.
This move highlights the UAE’s commitment to positioning itself at the forefront of digital innovation.
DLT Foundations Regulations
The new regulatory framework addresses the specific legal requirements of Blockchain Foundations, Decentralised Autonomous Organisations (DAOs), and the broader crypto industry.
The framework was created after an exhaustive consultative process with key industry stakeholders to ensure it incorporates valuable feedback and enhances its applicability. It provides a unified solution for the needs of digital asset-related activities while also considering the broader Foundations landscape.
Under the new regime, DAOs and other digital ledger entities can operate legally in the Emirate and issue tokens to their members.
Crypto hub ambitions
ADGM’s also offers significant benefits to the broader Web3 community. By promoting improved governance and recognizing the decentralized principles inherent in this sector, Abu Dhabi is setting a precedent for international financial hubs.
The Emirate is actively competing to establish itself as a cryptocurrency hub, aligning its efforts with Dubai’s initiatives to embrace the digital assets sector.
The regulatory framework in Abu Dhabi presents an attractive option for companies seeking clear and reliable regulations that are distinct from those found in other parts of the world.
Dubai has a significant lead over Abu Dhabi in terms of regulating crypto, with most aspects of the industry now supervised by financial watchdogs. The Emirate has been involved with digital assets for a number of years now and established an economic free zone dedicated to digital and virtual asset service providers.
The zone covers emerging technologies such as the metaverse, blockchain, utility tokens, virtual asset wallets, nonfungible tokens, DAOs, decentralized applications, and other Web3-related businesses.