Abu Dhabi Bourse Issues Thought Paper as It Eyes Crypto Transition

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Abi Dhabi Securities Exchange (ADX) on Tuesday issued a paper on crypto and distributed ledger infrastructure, Emirates News Agency reported.

The “thought paper,” according to the $135 billion Bourse, identifies the technical and operational standards required to issue crypto-assets. It specifically assists financial institutions that are undergoing a transition from conventional asset issuance to more encrypted asset issuance.

Rashed Al Blooshi, Chief Executive of ADX, confirmed that their latest announcement has appeared in response to the growing development of blockchain infrastructure in the region. He acknowledged how their regulatory practices would need to pace up as the transition from old-to-new finance takes place.

“Financial market infrastructure plays a pivotal role in supporting crypto markets, offering investor protection, preventing market fragmentation, as well as making it possible for financial institutions to provide advanced services in the field of crypto-assets,” Blooshi explained. “At ADX, we embrace new and innovative technology and are always looking to capitalize on advancements in FinTech; particularly in crypto-assets to optimize the benefits we offer to our investors and stakeholders.”

Abu Dhabi is witnessing an ample amount of public and private digital ledger projects, encompassing international trading, transportation, energy, healthcare, and education. All of these new DLT pilots will likely issue native tokens to their stakeholders and participants to prove voting rights and ownership. Nevertheless, the projects could fail without proper due diligence as the market has seen with the downfall of many similar projects. It has prompted local regulators to take notice of the outdated regulations that may not be enforced on advanced FinTech wings like the DLT and their unique ways of asset issuance.

The ADX thought paper, issued in cooperation with the Central Securities Depositories, could be the first critical step in ensuring maximum investor protection in the booming regional crypto asset sector. The Emirates Securities and Commodities Authority (ESCA) has already publicized their interests towards introducing initial coin offering for capital markets, according to their announcement from October this year. ADX is developing an ICO trading platform for the initiative.

ESCA is currently drafting the ICO regulation with support from an unnamed international organization which, according to rumors, is the International Securities Service Association, ISSA, the organization which also provided patronage for the ADX Thought Paper on crypto and blockchain.

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