The Abu Dhabi Global Market’s (ADGM) Registration Authority has put forward a proposal for a new legislative framework for distributed ledger technology (DLT).
The proposal targets disclosures, liquidation, and governance structures, aiming to establish a tailored legislative framework that considers the features of foundations that might be attractive to developers of DLT projects.
These include decentralized autonomous organizations (DAO), a favored governance structure for decentralized initiatives.
The ADGM is an international finance center within the UAE and has a bespoke licensing regime for virtual asset service providers.
While the authority is not the ADGM’s financial watchdog, the proposal is limited to tackling matters of service type and governance.
The proposed “DLT Foundations Regulations 2023” covers reporting, disclosures, and publication, as well as insolvency and liquidation measures.
The Consultation Paper invites input from anyone operating or planning DLT projects, persons engaging in digital asset-related activities, and their legal advisors, as well as DLT industry participants, associations, and stakeholders.
This proposal is of particular interest as both the Abu Dhabi and Dubai emirates of the UAE have been working to establish regulations that could attract blockchain and crypto firms to the region.
Dubai enacted a crypto regulatory framework earlier this year, and the UAE unveiled federal licensing requirements for virtual asset service providers looking to operate in the country last week. In February, Abu Dhabi kicked off a $2 billion initiative to support Web3 projects.