The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) announced on Tuesday that it has made several amendments to its rules governing ‘virtual assets‘.
The regulator, which oversees financial services activities in the economic free zone, made the changes after garnering feedback from market participants.
Some of the key points include a prohibition on privacy tokens and algorithmic stablecoins.
Privacy tokens allow users to make anonymous transactions and have been associated with money laundering. Algorithmic stablecoins are pegged to another reference-asset, like the US dollar, but do not hold any of that reference asset to back their pricing. Instead the peg is maintained by an algorithm.
Other changes include the ability of the regulator to introduce product intervention measures around cryptocurrencies and stablecoins, as well as the fees and capital requirements that firms involved with digital assets will be subject to in the ADGM.
The regulator also noted that it has expanded the set of digital assets that venture capital funds can invest in.
“The implementation of these changes marks a significant milestone in the evolution of the FSRA’s framework for digital asset regulation,” said Emmanuel Givanakis, Chief Executive Officer of the FSRA.
“Through extensive consultation with industry stakeholders, we have further enhanced our framework to provide the regulatory certainty that industry participants need, while addressing the evolving risks of the digital asset ecosystem. We believe this further positions ADGM as a premier jurisdiction for digital asset-related activities and shows our commitment to fostering responsible innovation in financial services.”
