The Financial Services Regulatory Authority along with Abu Dhabi Global Market’s (ADGM) regulatory body and audit firm KPMG published a review of the project’s “successful” first phase of its blockchain-based Know Your Customer (KYC) utility project. The review outlines the project’s development over a period of four months, together with a consortium of major UAE-based financial institutions. The institutions include Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, First Abu Dhabi Bank and others. The use of cryptography and digital signatures, among other features, can contribute toward a secure, unified, and convenient system for upholding robust KYC standards across the industry.
The regulatory chief of Abu Dhabi’s international financial centre and free zone acknowledges that cryptocurrency is a booming global sector. Though he stresses on tighter regulations for cryptocurrency trading and initial coin offerings (ICOs) to deplete any illegal activity.
Abu Dhabi Global Market (ADGM) last year published a guidance on virtual currencies and initial coin offerings – the digital currency version of public share listings – following widespread criticism of the industry and extreme volatility in the trading prices of popular cryptocurrencies such as Bitcoin.
Abu Dhabi Global Market (ADGM) was the first GCC financial centre to issue guidance on virtual money. The document clarifies how and for whom ICOs can be used to raise funds and states that the virtual “tokens” offered for sale in ICOs should be treated as “special investments” under ADGM’s regulatory framework. Virtual currencies, on the other hand, should be treated as commodities, it adds.
We are confident that our comprehensive regime – which we have shared with global regulators like the SEC [US Securities and Exchange Commission], the UK Treasury, Financial Conduct Authority and Bank of England, and regulators in Singapore, Hong Kong and Japan – can address these risks and bring greater confidence into this asset class, While the rapid rise of cryptocurrencies has captured the world’s attention, many analysts and regulators have warned investors to be careful, claiming it is a bubble waiting to burst and citing lack of global regulation.