Abu Dhabi’s proposed legislative framework for distributed ledger technology (DLT) is making waves in the blockchain and cryptocurrency industries, as regulatory uncertainty in the United States forces companies like Coinbase to seek more favorable operating environments overseas. The Abu Dhabi Global Market’s (ADGM) Registration Authority recently released the “DLT Foundations Regulations 2023,” seeking feedback on regulations governing disclosures, liquidation, and governance structures for DLT projects. The proposal aims to provide legal clarity to developers and blockchain firms, fostering an environment that supports innovation and growth.
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In stark contrast, the United States has struggled to provide clear regulatory guidance for the blockchain and cryptocurrency sectors. The current US regulatory climate has been criticized for stifling innovation and hindering economic growth. Critics argue that SEC Chair Gary Gensler’s aggressive stance towards cryptocurrencies, which has led to enforcement actions against companies like Ripple and developers like Tron, is pushing legitimate businesses and entrepreneurs out of the country.
As a result, US-based companies like Coinbase are increasingly looking to jurisdictions like Abu Dhabi, where regulatory clarity and tax benefits are more attractive. This shift not only deprives the US of potential economic growth and job creation but also forces American citizens to rely on offshore companies for their cryptocurrency needs. Industry insiders argue that Gensler’s actions are harming US investors and consumers, while benefiting traditional financial institutions such as his former employer, Goldman Sachs.
Accusations of market manipulation have been leveled against Gensler, with critics claiming that his actions are intentionally designed to undermine the burgeoning blockchain industry in the United States. By driving legitimate companies like Coinbase and Ripple out of the country, Gensler is accused of creating an environment in which big banks can maintain their dominance, at the expense of innovation and economic opportunity.
The United Arab Emirates (UAE) has taken a more proactive approach to blockchain and cryptocurrency regulation, with both Abu Dhabi and Dubai enacting frameworks to attract industry players. As the US continues to struggle with its regulatory stance, it risks falling behind in the global race to become a hub for blockchain innovation and investment. The growing disparity between the US and jurisdictions like Abu Dhabi highlights the urgent need for regulatory clarity and a more supportive environment for blockchain and cryptocurrency companies in the United States.