Businesses in Abu Dhabi, the capital of the United Arab Emirates’, or UAE, are increasingly embracing blockchain technology as local regulators move towards adopting inclusive legislation regarding crypto assets.
Though Abu Dhabi Global Market, or ADGM, announced its plan to allow crypto asset trading in 2018, the UAE capital has taken a cautious approach to rolling out permissive regulations.
However, Abu Dhabi Islamic Bank, or ADIB, recently became the first Islamic bank to execute trade finance distribution transactions, and the ADGM is readying to launch crypto asset trading in Q2 2020.
ADIB executes blockchain-based trade finance distribution
On April 15, ADIB claimed to be the first Islamic institution to successfully execute trade finance distribution transactions using distributed ledger technology, or DLT.
ADIB conducted multiple cross-border transactions with partner banks using TradeAssets, a blockchain-based digital trade finance marketplace. The milestone is the product of a year of collaboration between TradeAssets and ADIB.
Haytham Elmaayergi, ADIB’s global head of transaction banking, stated: “ADIB is committed to expanding its digital footprint in trade financing and distribution, enhancing the efficiency and productivity of businesses across the region and globally.”
Abu Dhabi Global Market to launch crypto trading by July
ADGM, Abu Dhabi’s top international finance center and free economic zone, is currently slated to launch regulated digital asset trading before Q3 2020.
In 2019, the Financial Services Regulatory Authority issued in-principle approvals to several companies preparing to operate crypto asset exchanges.
Speaking to Cointelegraph, Leon Smith, the chief executive of DEX — a crypto exchange that received in-principle approval from Abu Dhabi’s financial regulator, described the ADGM’s decision to launch regulated crypto trading as “a ground-breaking step for the region.”
“Everyone involved at ADGM is to be applauded for their efforts in making this happen,” he stated, adding: “This is very much about transforming ADGM into a global financial hub and part of the wider Abu Dhabi narrative.”
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Justin Lake is the Founder of Think Numbers, a consultancy that specialises in Finance Transformation.