Abu Dhabi’s crypto and blockchain business is expected to grow exponentially and attract international investors, especially from the United States.
Abu Dhabi Global Market Registration Authority (ADGM) has released a consultation document seeking comments on its proposed new framework for the Distributed Ledger Technology (DLT) market and token issuance. The regulatory authority has set Friday, May 12 as the deadline for giving its opinion on the proposed legal framework. Then the regulator will review the comments and later the ADGM board will present the final form of the legal proposal.
The initiative comes amid the rise of the decentralized economy both in Abu Dhabi and internationally. Since the regulatory framework has jurisdictions in the international financial center of the United Arab Emirates (UAE), the authority is keen to attract investors to the decentralized market.
“ADGM has generated interest in using ADGM foundations for DLT purposes and issuing unregulated utility tokens. However, while foundations are inherently well suited for DLT projects, certain characteristics and requirements current regimes of our foundations impose constraints that are undesirable for DLT projects,” the proposal noted.
Dubai as Blockchain and Crypto Hub
The UAE is striving to become a favorable investment hub for blockchain-related businesses. Earlier this year, Dubai laid out plans to allow crypto companies to obtain the relevant operational licenses. Under the new licensing mandate, all aspiring crypto businesses in Dubai would need to seek approval from the Virtual Assets Regulatory Authority (VARA).
“With bespoke rules and guidelines designed to provide clarity, ensure certainty and mitigate market risk, VARA seeks to develop a model framework for global economic sustainability in an innovation-centric environment that is truly without borders, technology-independent and forward-looking,” the regulator noted.
The Virtual Assets Regulatory Authority has issued several orders on the advertising of crypto assets. In this regard, the country was keen to protect investors from exploitative companies and at the same time provide an enabling environment for technological innovation. Additionally, blockchain technology has been developed to modernize the traditional financial sector and meet the growing demand for fast, secure and reliable payments. Notably, the UAE is keen to attract American crypto companies fleeing a hostile SEC takeover. For example, Coinbase Global Inc (NASDAQ:COIN), in its latest quest to diversify into the global market, has sought out Dubai crypto licenses.
Other notable crypto investors already in the Dubai market include Binance and Ripple Labs. As a result, the local authority has been able to carry out job creation and economic expansion projects.
The big winner of blockchain adoption in Abu Dhabi is Bitcoin and the rest of the crypto market, which has a valuation of around $1.2 trillion. With the European Union already pro-crypto, other countries around the world should adopt accommodating blockchain policies. As a result, next year’s halving event, which will create a new crypto bull market, will encompass more traditional markets.
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