The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) has introduced a proposed framework to oversee the issuance and management of these digital assets. The Abu Dhabi Global Market (ADGM)’s Financial Services Regulatory Authority (FSRA) has proposed a framework to supervise the issuance and management of these digital assets.
In response to growing interest from stakeholders in the issuance of FRTs, the FSRA’s proposal outlines several key requirements for issuers. Among the most important is the mandate that the market value of reserve assets must at least match the total value of all FRTs in circulation at the end of each business day. Additionally, we must value these assets daily using a mark-to-market approach to ensure accuracy.
The proposal also stipulates that issuers managing multiple FRTs must maintain separate pools of reserve assets for each token and manage them independently. This measure aims to protect the integrity of each FRT by avoiding the risks that come with asset commingling.
The FSRA is actively seeking public feedback on this regulatory framework, with a deadline for comments set for October 3, 2024. Following the feedback review, the FSRA will consider any necessary revisions before finalizing the regulations.
This move aligns with Abu Dhabi’s broader strategy to enhance its position as a leading global hub for digital assets. The United Arab Emirates (UAE) has been gaining recognition as a crypto-friendly destination, attracting investors and firms from around the world. Recent developments, including the introduction of a stablecoin licensing system by the Central Bank of the UAE, further underscore the countryâ€TMs commitment to fostering innovation in the digital economy.
The FSRA is also reviewing existing regulated activities to identify any necessary amendments to accommodate the use of FRTs in a variety of financial services. A separate consultation paper will share additional proposals resulting from this review.
Abu Dhabi’s proactive approach in regulating FRTs and other digital assets highlights its dedication to creating a secure and transparent environment for investors and businesses, further solidifying its status as a key player in the global digital economy.
