Abu Dhabi Publishes “Comprehensive” Crypto Asset Regulations

Omar Faridi
  • Abu Dhabi has released a comprehensive regulatory framework for crypto assets after the “successful completion” of a public consultation.
  • The United Arab Emirate’s capital city has committed to a long-term plan of “innovation and sustainable initiatives”, and the crypto asset regulations aim to further “bolster” and diversify the local economy.

The Abu Dhabi Global Market (ADGM) has recently launched a crypto asset regulatory framework, which aims to establish “proper governance, oversight, and transparency” over the city’s blockchain and cryptocurrency industry.

Reportedly, these regulations aim to monitor cryptocurrency exchanges and other “spot crypto asset activities” such as “custodians and other intermediaries.” ADGM is part of Abu Dhabi’s financial services regulatory bodies and has developed the crypto regulations after a public consultation.

The main objective of the regulatory guidelines will be to mitigate the risks involved in activities related to crypto assets such as money laundering and other types of financial crimes, according to ADGM Financial Services Regulatory Authority (FSRA). Additionally, the FSRA plans to help local crypto related businesses offer better consumer protection, while also providing improved “technology governance, custody, and exchange operations” guidelines.

Economic Diversification Through Sustainable Initiatives

Moreover, the crypto asset regulatory framework is part of ADGM’s concerted effort to support Abu Dhabi’s long-term plan to diversify its economy “through innovation and sustainable initiatives.” According to ADGM, responses to its efforts in setting up crypto regulations have been positive, as respondents have reportedly stated the proposed regulatory framework is “comprehensive.”

The financial regulator added that it has taken feedback and used it to make “several refinements” to the regulatory guidelines. Per AGDM, one of the main changes it has made was to “the implementation of the Daily Value Trading Levy”, which is set by cryptocurrency exchanges “on a sliding scale basis.”

Commenting on the UAE capital city’s crypto asset regulatory framework, ADGM CEO Richard Teng stated:

We are encouraged by the significant global and regional interest from exchanges, custodians, intermediaries and other institutions to our crypto spot regulatory framework…Our engagement with fellow global regulators also validated our position that the key risks highlighted have to be addressed for crypto assets to be more widely accepted and institutionalised.

Richard Teng

In addition, the FSRA has released an application form called ‘Guidance - Regulation of Crypto Asset Activities in AGDM’. The form is meant to help guide applicants in setting up a crypto related business according to regulatory guidelines specified by AGDM.