Abu Dhabi Global Market Financial Regulator Unveils Virtual Asset Regulation ‘Guiding Principles’ – Regulation Bitcoin News

Abu Dhabi Global Market’s financial regulator, the Financial Services Regulatory Authority (FSRA), recently unveiled six principles that will guide its “approach to virtual asset regulation and supervision.” Though not legally binding, the principles, according to the FSRA, must be “viewed as a complement to the comprehensive detail of our published framework.”

A ‘Basis for Regulatory Cohesion Across Jurisdictions’

Abu Dhabi Global Market (ADGM), which is a financial hub and global freezone based in Abu Dhabi (UAE), unveiled six guidelines for supervision and regulation of virtual assets recently. The principles, which were announced by its financial industry regulator, the Financial Services Regulatory Authority (FSRA), are intended “to support engagement with other like-minded regulatory agencies in and outside the UAE.”

Though not legally binding, the principles, according to the FSRA, must be “viewed as a complement to the comprehensive detail of our published framework.” According to the regulator, the six principles are potentially the basis “for regulatory cohesion across jurisdictions.”

In addition to “providing an accessible view” of the FSRA’s priorities in this space, the principles are also a manifestation of the regulator’s risk appetite in the areas relating to regulation.

“Each principle is a declaration of the FSRA’s risk appetite in the areas of regulation,
Financial crime, authorisation, supervision, enforcement, international cooperation. When viewed holistically, these expectations are calibrated to ensure the appropriate balance between confidence in our ecosystem, risk sensitivity, customer protection and attracting new entrants,” the regulator explained.

High Authorization Standards

As shown in the document outlining the key attributes of each approach to regulating virtual assets, the FSRA’s principle number one calls for the creation of “a robust and transparent risk-based regulatory framework.” Such a framework should, on the one hand, “introduce a clear taxonomy defining VAs (virtual assets) as commodities within the wider digital asset universe and requires the licensing of entities engaged in regulated activities that use VAs within ADGM.”

On the other hand, the same framework should give licensed virtual asset entities the “same regulatory status within ADGM as any other licensed entity.”

Prioritizing the highest standards in authorization is the second principle. The FSRA states that virtual asset regulation should also consider prevention of money laundering and financial crime. The regulators should also be committed to using enforcement tools when licensed entities break regulations.

Let us know your opinions on the story. Comment below and let us know how you feel.

Terence Zimwara

Terence Zimwara, a Zimbabwean journalist, writer and author who has been awarded the Zimbabwe Booker Prize. He is a prolific writer on the economic woes of African countries, as well as digital currencies that can be used to provide an escape path for Africans.