A committee to help build a ‘robust, credible and comprehensive regulatory and business ecosystem’ for blockchain and virtual assets has been established by authorities in the United Arab Emirates (UAE) capital Abu Dhabi.
The Abu Dhabi Blockchain and Virtual Assets Committee has held its first meeting – under the chairmanship of H.E. Mohamed Ali Al Shorafa, who is chairman of the Abu Dhabi Department of Economic Development and the Securities & Commodities Authority – to discuss a strategy aligned with the Emirates’ economic strategy, according to an announcement by the Abu Dhabi government.
The newly formed committee discussed the importance of regulating blockchain and virtual asset activities to comply with ‘international and local’ laws on anti-money laundering (AML)/combating the financing of terrorism (AML/CFT). It has the broader objective of helping to build an ‘ecosystem that is safe, sound and transparent, which will help build trust and attract more companies to Abu Dhabi’, according to the announcement.
The committee’s first gathering comes just over 12 months after the Abu Dhabi-headquartered Arab Monetary Fund (AMF) published ‘Strategies for Adopting DLT/ Blockchain Technologies in Arab Countries’, a guide describing ‘great opportunities’ across financial services in fostering the use of DLT (distributed ledger technology) and blockchain.
‘Building a national strategy for the adoption of DLT by public and private sector enterprises is the first step in the successful, speedy, economic and tailored adoption of DLT technology in any country,’ the 70-page guide noted. But it added that ‘given the nascency of DLT technically, legally and regulatorily, identifying the key elements of such a national strategy may be challenging.’
Fintech among priority areas
“The committee is bringing together all the relevant stakeholders to build a robust, credible and comprehensive regulatory and business ecosystem that addresses key risks and major governance issues, such as AML/CFT, investor protection, tech governance and custody risk, to promote blockchain and virtual assets,” Al Shorafa said.
“This will allow us to capitalise on blockchain technology and virtual assets to achieve Abu Dhabi’s aspirations,” he continued, adding that “the priority areas for this will be growth clusters including agritech [agricultural technology], fintech, healthcare and biopharma, energy, tourism and ICT as we aim to foster businesses in these sectors to expand and accelerate”.
The newly formed committee includes among its members: Dhaher bin Dhaher Al Mheiri, chief executive of Abu Dhabi Global Market (ADGM) Registration Authority, and his colleague Wai Lum Kwok, who is the authority’s senior executive director – authorisation; Mohammed Kaissi and Faisal Al Hammadi, who are respectively director of strategic projects and executive director (incubation) at the Abu Dhabi-based investment and holding company ADQ; H.E. Mohamed Jameel Al Ramahi, the long-serving chief executive of Masdar (Abu Dhabi Future Energy Company); Ibrahim Ajami, head of ventures and growth at Abu Dhabi investment fund Mubadala; Abdulla Al Shamsi, director-general of the Abu Dhabi Investment Office; and H.E. Dr Maryam Buti Al Suwaidi, who was appointed last year as the Securities & Commodities Authority’s first female chief executive.
ADGM introduced a framework for operating crypto asset businesses in 2018 and describes itself as ‘the world’s first jurisdiction to introduce and implement a comprehensive virtual assets regulatory regime’.
Elsewhere in the UAE, the Dubai Virtual Assets Regulatory Authority was established almost six months ago and Dubai authorities have also been encouraging blockchain. In addition, Dubai launched a metaverse strategy this July with the aim of turning the city into one of the world’s top 10 ‘metaverse economies’. Developing ‘Web3’ technology and its applications to create ‘new governmental work models’ is among the strategy’s ambitions.
The UAE government launched the ‘Emirates Blockchain Strategy 2021’ in 2018 with the aim of shifting 50 per cent of government transactions to blockchain by 2021.
‘Arab Monetary Fund publishes open finance guidance’ – our news story (4 January 2022) on an AMF paper (‘Open finance: A framework for the Arab region is more than a question of scope’) examining the transition from open banking to open finance in the context of the region
‘Arab Monetary Fund issues blockchain adoption guide’– our news story (31 Aug 2021) on the AMF’s ‘Strategies for Adopting DLT/ Blockchain Technologies in Arab Countries’
‘Arab Monetary Fund highlights regional fintech progress’ – our news story (6 Aug 2021) on the AMF’s publication of the second edition of the ‘Arab Region Fintech Guide’
‘Arab Monetary Fund launches regional fintech development index’ – our news story (5 May 2021) on the inaugural ‘FinxAr’ index
‘Arab central banks: governments must ‘open up’ to open banking’ – our news story (1 Dec 2020) on an AMF ‘A Vision of Open Banking in the Arab World’ publication