Abu Dhabi Global Market Financial Regulator Unveils “Guiding Principles” of Virtual Assets Regulation – Bitcoin News Regulation

Abu Dhabi Global Market’s financial regulator, the Financial Services Regulatory Authority (FSRA), recently unveiled six principles that will guide its “approach to the regulation and supervision of virtual assets”. While not legally binding, the principles, according to the FSRA, should be “seen as a complement to the full details of our published framework”.

A “basis for regulatory cohesion between jurisdictions”

Abu Dhabi Global Market (ADGM), a financial center and global free zone based in the United Arab Emirates (UAE), recently unveiled six guiding principles for the regulation and supervision of virtual assets. The principles, which were announced by its financial sector regulator, the Financial Services Regulatory Authority (FSRA), are intended to “support engagement with other like-minded regulatory agencies within and outside the United Arab Emirates “.

While not legally binding, the principles, according to the FSRA, should be “seen as a complement to the full details of our published framework”. According to the regulator, the six principles are potentially the basis “for regulatory cohesion between jurisdictions”.

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

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

High authorization standards

As shown in the document structure

key attributes of any approach to virtual asset regulation, FSRA 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 that defines VAs (virtual assets) as commodities within the broader universe of digital assets and requires the licensing of entities engaged in regulated activities that use VAs within of the CEO “.

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

Meanwhile, the second principle requires maintaining high standards when granting permission. The prevention of financial crime and money laundering is another key factor that should guide the regulation of virtual assets, the FSRA says. Another principle that should guide regulators is a commitment to use enforcement tools in cases where authorized entities violate regulations.

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Terence Zimwara

Terence Zimwara is an award-winning journalist, author and writer from Zimbabwe. He has written extensively on the economic problems of some African countries and how digital currencies can provide Africans with an escape.

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