Abu Dhabi Unveils Regulatory Framework for DAOs, DeFi, and Web3 Companies November 3, 2023 November 3, 2023 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Market NewsNovember 3, 2023 by Kelly Cromley

Abu Dhabi Unveils Regulatory Framework for DAOs, DeFi, and Web3 Companies

Abu Dhabi has introduced a comprehensive framework aimed at regulating decentralized autonomous organizations (DAOs), decentralized finance (DeFi), and Web3 companies. The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) has declared the implementation of the Distributed Ledger Technology (DLT) Foundations Regulations 2023. This regulatory initiative is designed to accommodate the unique requirements of the blockchain industry, enabling organizations to operate and issue tokens within a regulated framework.

A Progressive Step for Digital Assets

The introduction of the DLT Foundations Regulations 2023 is a significant milestone in ADGM’s broader strategy to promote initiatives within the blockchain and digital assets sector. It represents a notable evolution in the regulatory landscape for digital assets, both in the region and on a global scale.

Leading the Way in Southeast Asia

Up to this point, Southeast Asia, with Hong Kong taking the lead, has been at the forefront of establishing definitive regulatory frameworks for digital asset companies. Hong Kong’s Securities and Futures Commission has already implemented rules for the regulation of virtual assets trading companies operating in the country. Consequently, since the rollout of this regulatory framework, numerous crypto organizations have expanded their presence in Hong Kong. Prominent examples include digital asset venture firm Hivemind Capital, along with the world’s largest crypto exchange, Binance.

A Framework for a Diverse Range of Entities

The framework unveiled by Abu Dhabi is intentionally designed to cater to a diverse array of entities within the digital asset landscape. It is equally applicable to Blockchain Foundations, Web3 entities, DAOs, and traditional Foundations looking to enhance their operations through Distributed Ledger Technology (DLT). This regulatory regime offers a unified solution that comprehensively addresses the needs and requirements of activities related to digital assets and the broader crypto industry.

Balancing Governance and Decentralization

Crucially, the newly enacted regulatory framework aims to strike a balance between governance and the fundamental need for decentralization within the industry. It seeks to provide a structured approach to managing digital assets while preserving the essence of decentralization that is a defining characteristic of many blockchain-based entities.

Chairman of ADGM, His Excellency Ahmed Jasim Al Zaabi, underscored the significance of this launch and the enactment of the regulatory framework. He stated, “Abu Dhabi is rapidly emerging as the destination of choice for global players at the forefront of digital asset development. The introduction of the DLT Foundations Regime marks a revolutionary step forward, reinforcing ADGM’s commitment to a proactive approach rooted in extensive cross-industry dialogue and collaboration with various stakeholders.”

In conclusion, Abu Dhabi’s proactive approach in implementing the DLT Foundations Regulations 2023 highlights the region’s growing prominence as a hub for digital asset innovation and development. This regulatory framework is set to provide clarity and structure to a wide range of digital asset-related activities while ensuring that the principles of decentralization and innovation continue to thrive in the blockchain industry.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.