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Abu Dhabi, the second-most populous emirate in the UAE, has introduced a formal regulatory framework for Decentralized Autonomous Organizations (DAOs) and other digital ledger entities as it doubles down on its ambition to be a leader in digital asset innovation within the Middle East.
The new framework allows DAOs to operate legally and issue tokens to their members, providing regulatory clarity for firms in the digital assets sector. Abu Dhabi is aiming to become a crypto hub alongside Dubai, and this move is part of a larger initiative to foster initiatives in the broader blockchain and digital asset realm.
Distributed ledger technology (DLT), which provides the basis for blockchain networks, is a system of recording and storing information on different ledgers within a network to ensure data accuracy and security.
The Abu Dhabi Global Market (ADGM) has adopted a forward-looking approach by introducing the DLT Foundations Regime, following extensive consultations with industry stakeholders. Beyond establishing global standards, this framework is poised to revolutionize the blockchain sector by enhancing efficiency and transparency, as per the statement.
Chairman of ADGM, His Excellency Ahmed Jasim Al Zaabi, in the statement, emphasized Abu Dhabi’s rapid transformation into a hub for digital asset innovators, underlining a dedication to nurturing an ecosystem that fosters technological progress.
The ADGM’s endeavor not only elevates Abu Dhabi’s reputation as a forward-looking legal jurisdiction but also offers substantial advantages to the broader Web3 community. By promoting improved governance and acknowledging the decentralized principles of this sector, Abu Dhabi sets a precedent for international financial hubs.
Related: Dubai VARA grants ‘initial approval’ to crypto firm WadzPay
Abu Dhabi is actively competing to establish itself as a cryptocurrency hub, aligning with Dubai’s endeavors to embrace the digital assets sector. The regulatory framework in Abu Dhabi offers a valuable option for companies seeking clear and reliable regulations that can be distinct from regulations found in other parts of the world.
As previously reported by Cointelegraph, an economic free zone dedicated to digital and virtual asset service providers in emerging technologies such as the metaverse, blockchain, utility tokens, virtual asset wallets, nonfungible tokens, DAOs, decentralized applications and other Web3-related businesses was recently inaugurated in Dubai.
Magazine: Crypto City: Guide to Dubai
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