Abu Dhabi, the second-most populous emirate in the United Arab Emirates, is making a significant move to solidify its position as a crypto hub alongside Dubai. This step is part of a broader initiative aimed at promoting innovation in the blockchain and digital asset space within the Middle East.
The emirate has introduced a formal regulatory framework for decentralized autonomous organizations (DAOs) and other digital ledger entities, providing a clear legal path for these organizations to operate and issue tokens to their members. This regulatory clarity is crucial for digital asset firms seeking to thrive in the region.
Abu Dhabi’s ambition to become a crypto hub alongside Dubai is evident in its proactive approach to fostering initiatives in the blockchain and digital asset sector. The new framework reflects a commitment to positioning Abu Dhabi as a leader in digital asset innovation within the Middle East.
At the heart of this regulatory development is distributed ledger technology (DLT), the foundational technology that underpins blockchain networks. DLT is a system for recording and securely storing information across multiple ledgers within a network, ensuring data accuracy and security.
The Abu Dhabi Global Market (ADGM), the financial regulatory authority in the emirate, has introduced the DLT Foundations Regime after conducting extensive consultations with industry stakeholders. This forward-looking framework is not only poised to set global standards but also promises to revolutionize the blockchain sector by enhancing efficiency and transparency.
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Ahmed Jasim Al Zaabi, Chairman of ADGM, emphasized Abu Dhabi’s swift transformation into a hub for digital asset innovators. The emirate is dedicated to nurturing an ecosystem that fosters technological progress and supports businesses operating in the blockchain and digital asset space.
The ADGM’s initiative further enhances Abu Dhabi’s reputation as a forward-looking legal jurisdiction and offers substantial benefits to the broader Web3 community. By endorsing improved governance and recognizing the decentralized principles of the blockchain and digital asset sector, Abu Dhabi sets a noteworthy example for international financial hubs.
Abu Dhabi’s active competition with Dubai to establish itself as a cryptocurrency hub in the region is notable. The regulatory framework unveiled in Abu Dhabi provides an attractive option for companies seeking clear and reliable regulations, setting it apart from regulatory environments found in other parts of the world.
As previously reported, Dubai has also been making strides in the digital asset sector, inaugurating an economic free zone dedicated to digital and virtual asset service providers. This zone caters to emerging technologies such as the metaverse, blockchain, utility tokens, virtual asset wallets, nonfungible tokens (NFTs), DAOs, decentralized applications, and other businesses operating in the Web3 space. This dynamic landscape in both Abu Dhabi and Dubai showcases the United Arab Emirates’ commitment to fostering innovation and growth in the blockchain and digital asset sectors, making it an increasingly attractive destination for businesses and entrepreneurs in the crypto space.
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