Abu Dhabi Global Market (ADGM) has introduced its pioneer regulatory framework for Web3 organisations, including blockchain firms, decentralised autonomous organisations, and traditional entities transitioning into distributed ledger technology (DLT).

This newly established framework, known as the Distributed Ledger Technology Foundations Regulation, will take effect immediately.

It will grant legality to DAOs, which have previously functioned within a legal grey area, enabling them to operate lawfully and issue tokens to their members.

The regulation stipulates that a DLT foundation must constitute a council comprising two to 16 members for administrative purposes and is required to disclose the identities of key figures. Its token holders will be regarded as beneficiaries, and the foundation is restricted from conducting activities that necessitate licensing by the ADGM Financial Services Regulatory Authority.

While the regulations have been officially published in November, their effective date is listed as October, and the initial registration application fees total $US1,470.

Abu Dhabi is positioning itself to become a notable hub for cryptocurrencies, in parallel with Dubai. The UAE embraces the digital asset sector and institutes a regulatory framework that offers clarity to firms seeking regulatory guidance, a feature not uniformly present elsewhere in the world.

In August, cryptocurrency exchange M2 secured financial services permission from the Abu Dhabi Global Market and has since launched its international platform for institutional and retail investors to buy, sell, and custody virtual assets.

According to a statement published at CoinDesk, ADGM Chairman Ahmed Jasim Al Zaabi stated, "The new regime serves as a driving force for positive change in the digital assets sector."