Abu Dhabi has developed a comprehensive regulatory framework for digital ledger technology

According to a press release, the Abu Dhabi Global Market (ADGM) Registrar (RA) issued customized rules for the cryptocurrency industry on November 2, known as the Distributed Ledger Technology (DLT) Foundation Regulations 2023.

The new rules aim to provide much-needed regulatory clarity to the crypto industry and position Abu Dhabi as the UAE's second crypto hub on a par with Dubai.

Ahmed Jassim Al Zabi, Chairman of the Abu Dhabi International Financial Centre, highlighted that Abu Dhabi is rapidly transforming into a digital asset innovation hub and is firmly committed to nurturing an ecosystem that fosters technological advancement.

The move underscores the UAE's commitment to positioning itself at the forefront of digital innovation.

DLT Foundation Regulations

The new regulatory framework satisfies the specific legal requirements of blockchain foundations, decentralized autonomous organizations (DAOs), and the broader crypto industry.

The framework was created following exhaustive consultations with key industry stakeholders to ensure that it incorporates valuable feedback and enhances its applicability. It provides a unified solution to the needs of digital asset-related activities, while also taking into account the broader foundation landscape.

Under the new regime, DAOs and other digital ledger entities can legally operate in the emirate and issue tokens to their members.

Ambition of the Cryptocurrency Hub

ADGM also offers significant benefits to the broader Web3 community. By promoting improved governance and recognising the principles of decentralization inherent in the sector, Abu Dhabi is setting a precedent for an international financial centre.

The UAE is aggressively competing to establish itself as a cryptocurrency hub, in line with Dubai's move to embrace the digital asset industry.

Abu Dhabi's regulatory framework offers an attractive option for companies seeking clear and reliable regulation that is different from the rest of the world.

Dubai is significantly ahead of Abu Dhabi when it comes to cryptocurrency regulation, with most aspects of the industry now being regulated by financial regulators. The UAE has been involved in the digital asset space for many years and has established an economic free zone specifically for digital and virtual asset service providers.

The zone covers emerging technologies such as metaverses, blockchains, utility tokens, virtual asset wallets, non-fungible tokens, DAOs, decentralized applications, and other Web3-related businesses.