Abu Dhabi Global Market (ADGM) has taken a significant step in enhancing its regulatory framework for the digital asset sector. The Financial Services Regulatory Authority (FSRA) of ADGM has announced the implementation of new amendments to its Digital Asset Regulatory Framework, effective immediately.
The key changes introduced by the updated framework aim to strike a balance between fostering innovation and managing risks in the rapidly evolving digital asset space. Firstly, the framework provides a clearer process for Virtual Asset (VA) firms to apply for their assets to be recognised as Accepted Virtual Assets (AVAs) within ADGM. This move is designed to provide market participants with greater predictability and transparency in regulatory outcomes.
The FSRA has introduced a new product intervention power, which aligns with global trends among financial regulators adopting more agile frameworks for supervising digital finance. This tool gives the FSRA more flexibility to respond to emerging risks in the digital asset space, particularly with investor protection and market integrity.
The revised framework also formally prohibits the use of privacy tokens and algorithmic stablecoins within ADGM, underscoring the FSRA’s cautious stance on assets that may raise compliance or systemic risk concerns. Furthermore, the amendments expand the investment options for Venture Capital Funds operating in the jurisdiction.
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