In an effort to strengthen its web3 landscape and capitalize on the projected growth of its crypto hub, Abu Dhabi is introducing new guidelines for blockchain-based firms. The Abu Dhabi Global Market (ADGM) has announced a set of rules that outline the establishment and operation of blockchain foundations, including decentralized autonomous organizations (DAOs) and web3 groups. These rules aim to create a seamless system for blockchain foundations to operate within the jurisdiction’s international free trade zone, attracting investment capital and enhancing the competitiveness and efficiency of the local markets.
Facilitating Blockchain Foundations
Like their counterparts in traditional systems, Distributed Ledger Technology (DLT) foundations offer technical and financial support to startups and smaller firms, providing essential infrastructure in the region without direct involvement. Ahmed Jasim Al Zaabi, the Chairman of ADGM, highlights that these new guidelines are part of the ongoing web3 strategy to optimize operational efficiency.
The guidelines stipulate certain conditions that blockchain foundations must fulfill, including registration, membership, and disclosure requirements. To establish a DLT foundation, founders are required to file a signed Charter with the Registrar, ensuring compliance with all relevant laws and financial obligations. Additionally, foundations are mandated to submit a copy of the White Paper, tokenomics, and DLT, if it has already been developed or subsequently filed.
DLT foundations hold a license distinct from a Financial Service Permission, limiting their ability to engage in activities beyond those expressly granted. Violation of this distinction may result in fines for defaulting members. Furthermore, the organizations must operate with a council of two to sixteen members and disclose the names of notable members, which will remain confidential.
To establish a DLT foundation, an initial application fee of $1,470 is required.
Middle Eastern Focus on Web3 and AI Hubs
Similar to European countries, many Middle Eastern nations are striving to create clear rules and regulations around the market to attract investments and foster the development of web3 and AI hubs. Dubai, in particular, has been successful in attracting numerous projects to the region, with industry executives expressing their enthusiasm for the growing adoption in the city.
A recent survey has revealed a growing appetite for Bitcoin and blockchain integration among investors, solidifying the UAE’s position as a leader in the crypto revolution. The survey indicates that 72% of investors prefer Bitcoin, illustrating the strong interest in blockchain technology and AI integration in the region.
