Insights: Decoding the virtual asset landscape

Insights: Decoding the virtual asset landscape

The potential of new financial technologies, particularly across distributed ledger technology (DLT) and digital assets, which includes virtual assets (VA), is becoming increasingly recognised as an engine for the transformation of financial services. The outcomes generated by these changes have the potential to make markets more transparent, cheaper, and less vulnerable to fraud. The growing introduction and use of digital assets can potentially provide the ability to trade, transfer or hold large amounts of value globally. While certain blockchain technologies have been around for a decade, it is really only in the last couple of years that virtual assets like Bitcoin or Ethereum, have truly moved more into mainstream consciousness, particularly as a means of trading and investment. Recognising and understanding the recent market challenges within the virtual asset industry, there is clearly a growing call for greater regulatory scrutiny and oversight of the industry, to ensure the risks posed by these activities are understood and mitigated appropriately. The conversations extend across investor protection requirements, custody arrangements, the use of various technologies within the industry, and the avoidance of illegal activities such as money laundering. Since 2015, ADGM as an international financial centre has been taking a leading role in