ADFW
Editor's Choice Middle East & Africa Thought Leadership Wealthtech

Abu Dhabi: Gateway to the Gulf for Digital Asset Providers

On day two of Abu Dhabi’s flagship event Abu Dhabi Finance Week (ADFW), the Asset Abu Dhabi conference puts the spotlight on the evolving investment strategies of hedge funds, private equity houses and venture capital giants across the global markets.

This year’s Asset Abu Dhabi will shed light on topics such as investing in the next decade of technology, investing in cities of the future, and insights derived from the world’s biggest hedge funds. The agenda will include the perspectives of institutional capital and asset allocators in a changing investment landscape.

Emmanuel Givanakis is the CEO of the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), where he oversees the financial services regulatory framework that governs the activities of ADGM and its registered entities.

Here, he underscores Abu Dhabi’s rise as a global financial hub, driven by ADGM’s innovative regulatory framework for digital assets, solidifying its commitment to staying at the forefront of financial innovation and progress.

Emmanuel Givanakis, CEO of ADGM FSRA
Emmanuel Givanakis, CEO, ADGM FSRA

Nestled in the heart of the United Arab Emirates, Abu Dhabi, the capital of the UAE federation is a dynamic metropolis known for its unique blend of tradition, innovation, and a robust economy. This thriving city has not only embraced modernity but has also been recognised as the ‘best city to live’ in the Middle East, making it a destination of choice for both businesses and individuals.

Abu Dhabi’s appeal extends far beyond its cosmopolitan charm. The city’s economic prowess is a central pillar of its global significance. Strategically positioned between the East and the West, Abu Dhabi also boasts a prime position that enables it to connect with over 75 countries within a 4-hour flight radius. This geographic advantage has solidified its status as a business-friendly hub with  first rate connectivity to the region and global destinations.

ADGM’s pioneering role in positioning Abu Dhabi

In recent years, this emirate has made significant strides in the international financial arena, largely attributed to the role played by the Abu Dhabi Global Market (ADGM). What sets Abu Dhabi and ADGM apart is its unwavering commitment to economic diversification, sustainability, and innovation. ADGM strengthens Abu Dhabi’s position as a leading financial centre and a business hub serving as a strategic link between the growing economies of MEASA and the rest of the world.

Operating within an international regulatory framework and based on the direct application of English common law, ADGM through its independent best in class regulatory authorities and a world class class common law court governs the entire Al Maryah Island and Al Reem Island which is designated as the financial free zone of Abu Dhabi.

As the world embraces the digital revolution, the global financial landscape is undergoing a profound transformation. Digitalised assets, powered by cutting-edge technologies like Distributed Ledger Technology (DLT), have become catalysts for change in the financial sector. These assets, including cryptocurrencies and tokenised securities, promise to revolutionise how we trade and transfer value across the globe.

Region-first revolution in the virtual asset space

Recognising the pivotal role that digital assets can play in the future of finance, ADGM’s Financial Services Regulatory Authority (FSRA) took a ground-breaking step in 2018, with the es establishment of a comprehensive regulatory framework for Digital Assets, with a specific focus on virtual assets (VAs), bringing the MENA region into the spotlight. This innovative and progressive step was undertaken as the demand for a open fair and transparent regulatory framework was sought by not only promoters of these assets but also importantly investors. The decision firmly placed Abu Dhabi on the global map as a hub for virtual asset trading and blockchain innovation.

ADGM’s pioneering regulatory framework for VAs encompasses spot and derivative markets in virtual asset activities, covering everything from multilateral trading facilities to brokers, custodians, asset managers and other intermediaries.

This framework provides an opportunity for leading virtual asset players, creating a business-friendly environment that positions ADGM as a global leader in regulating virtual asset activities. In the years following the framework launch, ADGM has evolved to become an international financial centre of choice for many regional and international start-ups, businesses and investors who wish to enter the digital and virtual asset market.

Industry engagement

The FSRA understands that the virtual asset landscape is dynamic and constantly evolving. To ensure open fair and transparent environment for all stakeholders, ADGM’s FSRA engages regularly with digital asset players and other stakeholders, staying abreast of industry innovation and technological developments. This is to ensure there are clear guidelines for digital assets operating within ADGM’s umbrella.

ADGM’s FSRA has continued to take strides in this area by issuing in March 2022  amendments to its capital markets framework, a part of which also focussed on virtual assets.

A milestone move in October this year, witnessed ADGM’s Registration Authority (RA) publish the Distributed Ledger Technology Foundations Regulations 2023, a new legislative framework for foundations that facilitate Distributed Ledger Technology (DLT) and token issuance. The key features of the DLT Foundations Framework include the structure of the DLT Foundations, governance and control, tokens, reporting, disclosures and publication, beneficial ownership, supervision, insolvency and liquidation/voluntary strike-off.

This new legislative framework showcases ADGM RA’s recognition of the overall suitability of foundation structures for DLT projects and the RA’s alignment with ADGM’s strategy to facilitate and support crypto initiatives.

A remarkable digital journey

In conclusion, Abu Dhabi‘s journey from a strong regional player to a global financial hub has been nothing short of remarkable. The visionary approach of ADGM and its regulatory agencies and court in creating a pioneering regulatory framework including for digital assets has firmly established Abu Dhabi as a hub for innovation and progress in the financial sector. ADGM’s efforts underscore its dedication to staying at the forefront of innovation in the ever-evolving world of finance.

As the world continues to embrace digital assets, Abu Dhabi’s prominence in this arena becomes even more pronounced, inviting entrepreneurs, businesses and investors to discover the boundless opportunities within this flourishing ecosystem.

 

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