Abu Dhabi Global Market’s financial regulator, the Financial Services Regulatory Authority (FSRA), recently unveiled six principles that will guide its “approach to virtual asset regulation and supervision.” Though not legally binding, the principles, according to the FSRA, must be “viewed as a complement to the comprehensive detail of our published framework.”
A ‘Basis for Regulatory Cohesion Across Jurisdictions’
Abu Dhabi Global Market (ADGM), a financial center and global free zone based in the United Arab Emirates (UAE), recently unveiled six guiding principles for virtual asset regulation and supervision. The principles, which were announced by its financial industry regulator, the Financial Services Regulatory Authority (FSRA), are intended “to support engagement with other like-minded regulatory agencies in and outside the UAE.”
Though not legally binding, the principles, according to the FSRA, must be “viewed as a complement to the comprehensive detail of our published framework.” According to the regulator, the six principles are potentially the basis “for regulatory cohesion across jurisdictions.”
In addition to “providing an accessible view” of the FSRA’s priorities in this space, the principles are also a manifestation of the regulator’s risk appetite in the areas relating to regulation.
“Each principle is a declaration of the FSRA’s risk appetite in the areas of regulation,
authorisation, financial crime, supervision, enforcement and international cooperation. When viewed holistically, these expectations are calibrated to ensure the appropriate balance between confidence in our ecosystem, risk sensitivity, customer protection and attracting new entrants,” the regulator explained.
High Authorization Standards
As shown in the document outlining the key attributes of each approach to regulating virtual assets, the FSRA’s principle number one calls for the creation of “a robust and transparent risk-based regulatory framework.” Such a framework should, on the one hand, “introduce a clear taxonomy defining VAs (virtual assets) as commodities within the wider digital asset universe and requires the licensing of entities engaged in regulated activities that use VAs within ADGM.”
On the other hand, the same framework should give licensed virtual asset entities the “same regulatory status within ADGM as any other licensed entity.”
Meanwhile, the second principle calls for the maintenance of high standards when granting authorization. Prevention of financial crimes and money laundering is another key factor that should guide the regulation of virtual assets, the FSRA asserts. A commitment to use enforcement tools in instances where licensed entities are in breach of regulations is another principle that should guide the regulators.
What are your thoughts on this story? Let us know what you think in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Credit: Source link
