Abu Dhabi seeks to beef up its web3 landscape with new guidelines for blockchain-based firms as its crypto hub is projected to grow in the coming months.
The Abu Dhabi Global Market (ADGM) announced new rules that create numerous blockchain foundations and how they operate within the jurisdiction including setting up of decentralized autonomous organizations (DAOs) and web3 groups.
The rules will create a smooth system of ushering blockchain foundations in its international free trade zone to attract investment capital and boost the competitiveness and efficiency of its local markets.
Distributed ledger technology (DLT) foundations like others in traditional systems provide technical and financial support for startups and smaller firms including offering key infrastructure in the region without direct involvement.
Ahmed Jasim Al Zaabi, the Chairman of ADGM explained that the latest development is part of its ongoing web3 strategy to create efficiency.
“By transforming the blockchain and Web3 landscape, we are moving towards a future characterized by setting global benchmarks with enhanced transparency and efficiency.”
Disclosure and tokenomics key criteria
The rules require blockchain foundations to fulfill several conditions from registration, membership, and disclosures.
To set up a DLT foundation, founders must file a signed Charter to the Registrar and state that all corresponding laws and financial requirements have been fulfilled.
Foundations are also to present a copy of the White Paper, tokenomics, and DLT if it has been initially developed or filed subsequently.
The license of a foundation differs from a Financial Service Permission making the former unable to act in other capacities not expressly given. Any contravention of this distinction would lead to a fine for defaulting members.
On its role and objectives, DLT foundations can embark on any activity as a going concern so far as it has been approved in its charter and must not be formed for an unlawful purpose against the country’s laws.
The organizations are further tasked with requirements to disclose names of notable members which will not be revealed to the public and must operate a council of two to sixteen members.
The initial application fee for DLT foundations has been pegged at $1,470.
The Middle East is pushing its crypto frontiers
Just like Europe, the Middle Eastern countries are seeking to create rule clarity around the market to drive investments stressing the development of web3 and AI hubs.
Dubai has been a key city to attract numerous projects into the region this year with industry executives expressing delight at growing adoption in the city.
🚨 #Dubai adopts the first virtual asset law and establishes Dubai Virtual Asset Regulatory Authority, focusing on organizing virtual assets and tokens, authorizing virtual asset service providers, and more. pic.twitter.com/JejNfPYzIF
— Cryptonews.com (@cryptonews) March 10, 2022
A recent survey showed increasing retail and wholesale appetite among investors adding, “This report not only illuminates their preferences but also solidifies the UAE’s position as a leader in the crypto revolution, with a dominant 72% preference for Bitcoin and a strong appetite for blockchain and AI integration.”