The Abu Dhabi Global Market (ADGM) digital asset ecosystem has been updated following public consultation with changes aiming to streamline approval processes, enhance investor protection and attract greater institutional participation.
The updates are particularly relevant to virtual asset service providers, institutional investors and asset managers, fintech and blockchain companies currently or planning to operate in the ADGM or legal and compliance teams advising on digital asset strategies, according to experts.
The Financial Services Regulatory Authority (FSRA) officially implemented the amendments to its regulatory framework for digital assets within the ADGM on 10 June.
Marie Chowdhry, an expert in fintech and financial regulation at Pinsent Masons, said: "This follows the recent updates to the Virtual Assets Regulatory Authority’s rulebooks and shows a clear trend: the UAE continues to lead in establishing forward-thinking, investor-protective digital asset regulations. These changes reflect a maturing market and a regulatory environment that is both responsive and proactive."
“The revised framework reinforces the UAE’s position as a global leader in digital asset regulation,” she said.
“It introduces greater clarity and efficiency in licensing and operational requirements, which is expected to reduce approval times and foster innovation while maintaining robust safeguards for market integrity and investor protection.”
The process for having virtual assets (VAs) approved with the FSRA has been refined, a revised capital requirements and fee structures for regulated activities involving VA’s have been introduced and new product intervention powers specific to VA’s have been implemented alongside rules reinforcing the prohibition on the use of privacy tokens and algorithmic stablecoins.
Jessa White, an expert in digital assets at Pinsent Masons, said: "The FSRA’s swift implementation of these amendments demonstrates its commitment to fostering innovation while maintaining high standards of market integrity."
“Both firms and employees in key industries should review the updated FSRA Rulebook on digital assets, assess whether their current or planned activities fall within the scope of the revised framework and engage with legal counsel to ensure compliance with the new requirements,” she said.
“They should also consider the strategic opportunities presented by a more streamlined and institutional-friendly regulatory environment.”
The amendments follow engagement and feedback on Consultation Paper No. 11 in 2024.
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