The Abu Dhabi Global Market (ADGM) Registration Authority is seeking feedback on its proposed legislative framework for distributed ledger technology (DLT). The ADGM is an international finance center within the United Arab Emirates (UAE) that has a bespoke licensing regime for virtual asset service providers supervised by its financial regulator. The proposed “DLT Foundations Regulations 2023” aims to set up a tailored legislative framework that considers the features of foundations that might be attractive to developers of DLT projects. The proposed regulations cover reporting, disclosures, publication, insolvency, and liquidation measures.
The proposed framework targets disclosures, liquidation, and governance structures for DLT projects, including decentralized autonomous organizations (DAO) – a favored governance structure for decentralized initiatives. The proposals aim to create a legislative framework that is attractive to blockchain and crypto firms, promoting the region as a hub for DLT innovation.
The ADGM is not the UAE’s financial watchdog, so the proposal is limited to tackling matters of service type and governance. The proposal is of interest to any persons operating or planning DLT projects, persons engaging in digital asset-related activities and their legal advisors, as well as DLT industry participants, associations, and stakeholders.
The UAE is working to establish regulations that could attract blockchain and crypto firms to the region. In February, Abu Dhabi launched a $2 billion initiative to support Web3 projects. Dubai enacted a crypto regulatory framework earlier this year, and the UAE unveiled federal licensing requirements for virtual asset service providers looking to operate in the country last week.
The proposed framework is part of the UAE’s effort to attract DLT innovation and investment to the region, positioning the UAE as a global leader in DLT regulation. The deadline for providing comments on the proposed framework is May 12, giving interested parties the opportunity to provide feedback and shape the future of DLT regulation in the UAE.
In conclusion, the proposed DLT Foundations Regulations 2023 aims to establish a tailored legislative framework for DLT projects that considers the features of foundations that might be attractive to developers of DLT projects. The proposed framework covers reporting, disclosures, publication, insolvency, and liquidation measures. The proposal is part of the UAE’s effort to attract blockchain and crypto firms to the region, positioning the UAE as a global leader in DLT regulation. The deadline for providing comments on the proposed framework is May 12, providing interested parties with the opportunity to provide feedback and shape the future of DLT regulation in the UAE.
