The Financial Services Regulatory Authority (FSRA), which oversees financial services in the Abu Dhabi Global Market (ADGM), has announced immediate changes to its regulatory framework for digital assets. These adjustments follow extensive consultations with industry stakeholders and are based on feedback received regarding Consultation Paper No. 11 of 2024.
The revisions focus on refining the approval process for virtual assets (VAs) as Acceptable Virtual Assets (AVAs) within ADGM. They also outline capital requirements and appropriate fees for licensed entities engaged in regulated virtual asset activities (virtual asset firms). Furthermore, the amendments grant specific intervention powers for regulating products related to virtual assets and establish rules reinforcing the current ADGM stance against the use of privacy-focused and algorithmic stablecoins. Lastly, the changes broaden the range of investments available to venture capital funds.
The FSRA has updated its guidance on regulating virtual asset activities in ADGM to reflect these new measures and offer clearer advice to virtual asset firms regarding the implementation of standards for evaluating Acceptable Virtual Assets (AVA).
Emmanuel Giavanakis, CEO of the FSRA at ADGM, stated that these amendments represent a significant milestone in the evolution of the regulatory framework established for overseeing virtual assets. Through extensive consultations with sector participants, we have further strengthened our regulatory framework to provide the regulatory certainty required by stakeholders in ADGM while addressing the evolving risks in the digital asset ecosystem. We believe this initiative solidifies ADGM’s position as a leading hub for digital assets.