Abu Dhabi Global Markets Financial Regulator Unveils ‘Guidelines’ for Virtual Asset Regulation – Regulation Bitcoin News

Abu Dhabi’s global market financial regulator, the Financial Services Regulatory Authority (FSRA), has recently released six principles that will guide its “approach to virtual asset regulation and supervision”. Although not legally binding, according to the FSRA the principles “should be viewed as a supplement to our published framework.”

“A Basis for Regulatory Coordination in Regions”.

Abu Dhabi Global Market (ADGM), the financial hub and international free zone based in the United Arab Emirates (UAE), has recently released six guidelines for the regulation and control of virtual assets. The principles, promulgated by the financial industry regulator the Financial Services Regulatory Authority (FSRA), are “intended to support relationships with like-minded regulatory agencies within and outside the UAE.”

Although not legally binding, according to the FSRA the principles “should be viewed as a supplement to our published framework.” According to the regulator, the six principles could form the basis of “regulatory relations across jurisdictions”.

In addition to providing an “accessible view” of FSRA’s priorities in this area, the Principles are a reflection of the regulator’s risk appetite in regulatory areas.

“Each principle is a statement of FSRA’s risk appetite in the regulation;
Licensing, financial crime, control, enforcement and international cooperation. “Overall, these expectations are adjusted to ensure an appropriate balance between trust in our ecosystem, risk exposure, customer protection and attracting new revenue,” the regulator explained.

High levels of authorization

As seen in the document outlining the key features of each approach to regulating virtual assets, FSRA principle number one calls for creating a “robust and transparent risk-based regulatory framework.” Such a framework requires, on the one hand, “the introduction of a clear taxonomy that defines VAs (virtual assets) as commodities in the wider digital asset universe and the licensing of entities engaged in regulatory activities that use VAs in the ADGM.”

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

Meanwhile, the second principle calls for maintaining high standards when granting permission. Preventing financial crimes and money laundering is another key issue that should guide the regulation of virtual assets, the FSRA explains. A commitment to use enforcement tools when licensed entities violate regulations is another principle that should guide regulators.

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Terence Zimwara

Terence Zimwara is an award-winning Zimbabwean journalist, writer and author. He has written extensively about the economic woes of some African countries and how digital currencies offer Africans an escape route.

Image credits: Shutterstock, Pixabay, Wiki Commons

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