With comprehensive regulatory standards, Abu Dhabi Global Market aims to become the hub of crypto companies

The Abu Dhabi Global Market is set to become a global crypto asset hub thanks to the comprehensive and strict regulatory framework defined by the financial center in June of last year. In fact, crypto exchanges and companies are lining up to get licensed under the framework in order to be recognized as trustworthy and regulated entities.

The cryptocurrency market is sensitive and complex. From the very beginning, the complications of this market and the public unawareness have been exploited countless times to defraud society with promises of magical returns on investment. The financial regulators and institutions had mostly been in denial of crypto assets and their importance up until a couple of years ago, which left the sector in dire need of proper regulatory standards to protect investors and avoid illegal activities through cryptocurrencies.

ADGM was one of the first financial regulatory bodies to define a comprehensive framework for the exchanges and firms dealing in crypto assets. This framework has given crypto related firms a place to call home with ADGM.

As cryptocurrencies and other blockchain powered assets grow exponentially, companies are looking for jurisdictions with clear and progressive regulations to base their operations in. Some of the world’s most powerful nations economically like the US, UK, Russia, China, Japan and India are still experimenting with legislation to control and tame the crypto market. In such environment, the clear ruleset defined in the regulatory framework by ADGM clears the air for these crypto focused companies and allows them to operate with freedom.

For instance, Facebook said that it plans to launch a digital currency, Libra, in 2020. The currency will be based in Switzerland in part due to a lack of regulatory clarity over the treatment of digital assets in the United States.

The framework put in place by ADGM takes into consideration the risks of money laundering, counter financing of terrorism, custody, and governance through the use of crypto assets. Financial experts and crypto enthusiasts around the world have praised Abu Dhabi’s approach to crypto regulation.

Companies prefer to work under a single authoritative regulator, as it provides stability and removes the need to please many different stakeholders. John Hensel, chief operating officer at Securrency, a financial services blockchain company based in the US, shared similar views.

Securrency picked Abu Dhabi for their international headquarters, after having considered Singapore, Switzerland, London, and Dubai. The comprehensive and thorough regulatory framework by ADGM is what forced Securrency to pull the trigger, according to Hensel.

While, the regulatory standards implied by ADGM are attracting crypto firms across the globe, it is definitely not because the it’s easy to match those standards. Many firms apply and are continuously rejected for not meeting the requirements of the license. According to some reports, 9 out of every 10 applications were rejected for not complying with the requirements set by the ADGM.

Such a comprehensive and thorough ruleset that’s been in place for over a year now is only boosting the confidence in Abu Dhabi to be a potential global hub for all crypto related activities.