ADX issues a thought paper on crypto assets

Wednesday, 28 November 2018

Abu Dhabi Securities Exchange (ADX), the region’s leading financial
market, announced the issuance of a thought paper on infrastructure for crypto and distributed
ledger environment, and financial market infrastructures (FMIs). The thought paper is issued in
cooperation with the Central Securities Depositories (CSD) and under the patronage of the
International Securities Service Association (ISSA).
CSDs have a clear responsibility to investigate the crypto-asset phenomenon and see where
they might be able to help the market develop a safe and efficient environment for issuers and
investors. ADX aims to identify the technical and operational criteria required to issue cryptoassets,
as well as provide a reliable reference to support financial institutions in managing the
transition of the issuance of traditional and crypto-assets.
Rashed Al Blooshi, Chief Executive of ADX, noted the importance the market plays as a member
of ISSA CSD Working Group, which works on further developing the implementation of
Distributed Ledger Technology (DLT) based on blockchain, as well as its contribution in the
development of the crypto-asset infrastructure study. Al Blooshi said: “ADX continues its efforts
to manage the transition from conventional assets to more encrypted assets, which are
witnessing major and rapid development in the region.”
Al Blooshi pointed to the importance of upgrading financial market infrastructure (FMIs) and
incorporating standards of governance within their systems to prevent market fragmentation,
increase investor confidence and raise the quality of its infrastructure.
Al Blooshi added: “FMIs play a pivotal role in supporting crypto markets, offering investor
protection, preventing market fragmentation, as well as making it possible for financial
institutions to provide advanced services in the field of crypto-assets. At ADX, we embrace new
and innovative technology and are always looking to capitalize on advancements in FinTech;
particularly in crypto-assets to optimize the benefits we offer to our investors and stakeholders.
Our approach is in line with Abu Dhabi government’s plans to strengthen digital transformation
in the emirate and represents one of our goals to develop a financial market that is safe,
transparent, efficient, and is in adherence with international best practices.”
It is noteworthy that ADX was the first stock market in the MENA region to adopt blockchain in
its e-voting for listed companies’ AGMs. Furthermore, in early 2018, ADX signed a Memorandum
of Understanding (MoU) with the Society for Worldwide Interbank Financial Telecommunication
(SWIFT) and seven leading global Central Securities Depository (CSD) companies, to collaborate
on blockchain implementation in trading and capital market transactions.
Additionally, ADX signed a partnership deal with Equichain to join its working community, which develops
implementations of digital blockchain transactions to bring further efficiencies to capital markets.