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Recognizing new realities in decentralization, the regulations aim to provide market players with governance flexibility within distributed ledger technology foundations.

By Stuart Davis, Brian Meenagh, Andrew Moyle, and Ksenia Koroleva

On October 2, 2023, the Board of Directors of Abu Dhabi Global Market (ADGM), a financial free zone in the United Arab Emirates (UAE), enacted the Distributed Ledger Technology Foundations Regulations 2023 (Regulations). The Regulations were published on November 1, 2023.

Latham & Watkins has advised ADGM in drafting the Regulations. The Regulations were developed following extensive benchmarking across a number of peer jurisdictions and incorporate stakeholder feedback from ADGM’s April 2023 consultation paper. The adoption of the Regulations is part of the strategy to promote ADGM as a global center for digital assets.

The Regulations recognize the suitability of common law foundation structures for projects related to digital assets, and aim to allow maximum flexibility for the sector with respect to governance.

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New Regulations balance innovation in the payments sector with safety, security and maintaining the public’s trust in the UAE payment ecosystem.

After a long period of consultation, on 1 January 2017 the Central Bank in the United Arab Emirates (UAE) issued the Regulatory Framework for Stored Values and Electronic Payment Systems (Electronic Payment Regulation). The Electronic Payment Regulation’s key message is that all eligible participating institutions (whether they are banks, payment networks, telecommunications companies, government…