Abu Dhabi, the UAE's second-most populous emirate, has taken the first steps to legalize the operations of decentralized entities such as DAOs.
Abu Dhabi has unveiled a new regulatory framework for decentralized autonomous organizations (DAOs) and other entities built on distributed ledger technology (DLT), marking the first push toward such a framework by a Middle Eastern territory, the Registration Authority of Abu Dhabi Global Market (ADGM) said Thursday in a statement.
The framework, effectively immediately, enables DAOs, which have long operated within a legal grey area, to operate legally and issue tokens to their members.
Distributed ledger technology, which provides the basis for blockchain networks, is a system of recording and storing information on different ledgers within a network to ensure data accuracy and security.
The move forms part of a larger initiative to "foster initiatives in the broader blockchain and digital asset realm" in Abu Dhabi, the United Arab Emirates’ second-most populous territory after Dubai.
Abu Dhabi is vying to become a crypto hub alongside Dubai as the UAE embraces the digital assets sector and has a regulatory framework that can be valuable for firms looking for regulatory clarity, in contrast to elsewhere in the world.
"The new regime serves as a driving force for positive change in the digital assets sector," ADGM Chairman Ahmed Jasim Al Zaabi said in a statement.
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"By transforming the blockchain and Web3 landscape, we are moving towards a future characterized by setting global benchmarks with enhanced transparency and efficiency,” he added.
