The crypto and blockchain business in Abu Dhabi is expected to grow exponentially and attract international investors, more so than the United States.
The Abu Dhabi Global Market (ADGM) Registry Authority has issued an advisory paper seeking feedback on a proposed new framework for distributed ledger technology (DLT) market and token issuance. The regulatory authority has set Friday 12 May as a deadline for providing feedback on the proposed legal framework. After that, the regulator will review the comments, after which the ADGM Board of Directors will present the final form of the legal proposal.
This initiative comes amid the rise of the decentralized economy in Abu Dhabi and internationally. With the regulatory framework that has powers in the international finance center within the UAE, the authority is keen to attract investors in the decentralized market.
“ADGM has received interest in connection with the use of ADGM institutions for DLT purposes and the issuance of unregulated utility tokens. However, while organizations are inherently well-suited to DLT projects, certain features and requirements within our existing enterprise systems impose undesirable constraints on DLT projects,” the proposal male.
Dubai as a Blockchain and Crypto Currency Hub
The UAE is working towards becoming a suitable investment hub for blockchain-related companies. Earlier this year, Dubai laid out plans to allow crypto companies to obtain relevant operational licenses. Under the new licensing mandate, all aspiring crypto companies in Dubai are expected to gain approval from the Virtual Asset Regulatory Authority (VARA).
“With rules and guidelines specifically designed to provide clarity, ensure certainty and mitigate market risk, VARA seeks to develop an exemplary framework for global economic sustainability in an innovation-centric environment that is truly borderless, technology-free, and future-focused,” the regulator noted. .
The Virtual Assets Regulatory Authority has issued several orders regarding the advertising of crypto assets. In this regard, the state has been keen to protect investors from exploitative business while at the same time providing an environment conducive to technological innovation. Moreover, 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 crypto firms from the US that are fleeing a hostile takeover by the SEC. For example, Coinbase Global Inc (NASDAQ:COIN) in its latest quest to diversify into the global market has pursued Dubai licenses for cryptocurrency.
Other notable crypto investors already on the Dubai market include Binance and Ripple Labs. As a result, the local authority was able to provide job opportunities and economic expansion projects.
The bigger picture
The overall winner in 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-cryptocurrency, other global countries are expected to enact facilitative blockchain policies. As a result, next year’s halving event that will create a new cryptocurrency bull market will involve more major markets.
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