The Abu Dhabi Global Market's (ADGM) Registration Authority is seeking feedback on its proposed legislative framework for distributed ledger technology (DLT), targeting disclosures, liquidation and governance structures.
The ADGM is an international finance center within the United Arab Emirates (UAE) and has a bespoke licensing regime for virtual asset service providers supervised by its financial regulator. The authority is not the ADGM’s financial watchdog, so the proposal is limited to tackling matters of service type and governance.
The proposed "DLT Foundations Regulations 2023" aims to set up a tailored legislative framework that considers "features of foundations that might be attractive to developers of DLT projects," which include decentralized autonomous organizations (DAO) – a favored governance structure for decentralized initiatives.
The proposals also cover reporting, disclosures and publication, as well as insolvency and liquidation measures.
"This Consultation Paper is of interest to any persons 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," the document said.
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.
The deadline for providing comments on the proposed framework is May 12.