Abu Dhabi Global Markets (ADGM) Seeks Feedback on Proposed DLT Legislative Framework

According to reports, the Abu Dhabi Global Markets (ADGM) Registry is seeking feedback on its proposed Distributed Ledger Technology (DLT) legislative framework, with the goal of disclosure, liquidation, and governance structures. ADGM is an international financial center within the United Arab Emirates (UAE) and has developed a customized licensing system for virtual asset service providers regulated by its financial regulatory authorities.

Abu Dhabi Global Market Registry is seeking feedback on its proposed legislative framework for distributed ledger technology

The Abu Dhabi Global Markets (ADGM) Registry is inviting feedback on its proposed Distributed Ledger Technology (DLT) legislative framework, aimed at improving the disclosure, liquidation, and governance structures. ADGM is an international financial center located within the United Arab Emirates (UAE) and has designed a tailored licensing system for virtual asset service providers regulated by its financial regulatory authorities. The proposed DLT legislation is intended to facilitate innovative use-cases of blockchain technology and contribute to the emergence of the blockchain ecosystem in the UAE.

Overview of ADGM’s Proposed DLT Legislative Framework

The proposed DLT legislative framework by ADGM seeks to lay the foundation for a robust and transparent digital asset economy in the UAE. The framework is designed to encourage the safe and secure deployment of blockchain technology while promoting regulatory compliance by virtual asset service providers. The ADGM DLT legislation also sets clear guidelines for initial coin offerings (ICOs) and security token offerings (STOs), registration of digital asset exchanges, and other DLT-related activities.

Objectives of ADGM’s DLT Legislative Framework

The ADGM DLT legislation aims to streamline the regulation of virtual asset service providers in the UAE, thereby promoting investor protection and market integrity. The framework seeks to achieve the following objectives:

Enhancing Disclosure and Transparency

The ADGM DLT legislation mandates accurate and timely disclosure of digital assets and virtual asset service providers’ financial and operational information. The framework requires virtual asset service providers to maintain adequate records of their transactions and make them available to regulators upon request.

Facilitating Liquidation

The proposed ADGM DLT legislation sets clear guidelines for the transferability and liquidation of digital assets. The framework requires virtual asset service providers to maintain adequate liquidity to honor their obligations and ensure the timely settlement of transactions.

Ensuring Good Governance

The ADGM DLT legislation lays down robust governance structures for virtual asset service providers. The framework requires virtual asset service providers to have appropriate systems and controls to mitigate operational risks and comply with relevant AML/CFT regulations.

Benefits of ADGM’s Proposed DLT Legislative Framework

The proposed ADGM DLT legislation offers several benefits to the UAE’s blockchain ecosystem, including:

Encouraging Innovation

The ADGM DLT regulatory framework seeks to create a conducive environment for digital asset innovation in the UAE. The framework enables startups and established players to explore new solutions for digital identity, supply chain, and other use-cases of blockchain technology.

Promoting Investor Confidence

The ADGM DLT regulatory framework enhances investor confidence in the UAE’s virtual asset economy. The framework sets clear guidelines for the custody, transferability, and liquidation of digital assets, promoting transparency and reducing the risk of fraud and market manipulation.

Advancing Regulatory Compliance

The ADGM DLT regulatory framework strengthens regulatory compliance of virtual asset service providers in the UAE. The framework sets clear requirements for AML/CFT, registration, and reporting, promoting adherence to international best practices and standards.

Conclusion

The ADGM DLT legislative framework is a significant step towards creating a robust and transparent virtual asset economy in the UAE. The framework seeks to encourage innovation while promoting investor protection and regulatory compliance. The feedback obtained by ADGM from various stakeholders will aid in the development of a comprehensive regulatory framework for the UAE’s blockchain ecosystem.

FAQs

1. What is ADGM’s proposed DLT legislative framework?
ADGM’s proposed DLT legislative framework sets clear guidelines for virtual asset service providers’ registration, disclosure, liquidation, and governance structures. The framework aims to create a conducive environment for blockchain innovation while promoting investor protection and regulatory compliance.
2. How will ADGM’s DLT legislative framework benefit investors?
ADGM’s DLT legislative framework enhances investor confidence in the UAE’s virtual asset economy. By promoting transparency and following international best practices regarding compliance and standards, the framework reduces the risk of fraud and market manipulation.
3. What are the objectives of the ADGM DLT legislative framework?
The ADGM DLT legislative framework aims to enhance disclosure and transparency, facilitate liquidation, and ensure good governance among virtual asset service providers. It provides clear guidelines for ICOs and STOs, registration of digital asset exchanges, and other DLT-related activities.