As we approach the midpoint of February, the Abu Dhabi Global Market (ADGM) has been in the spotlight for celebrating achievements as well as penalising firms for breaching regulations. 

The Financial Services Regulatory Authority (FSRA) of ADGM has imposed penalties on six financial institutions for contraventions of the Common Reporting Standard Regulations 2017 (‘the Regulations’). These fines totalled AED 170,000.

The actions taken by the FSRA address failures (to the extent applicable in each case) to:

• follow due diligence procedures as required by the Regulations;
• keep records of the performance of due diligence;
• report required information in a complete and accurate manner; and/or
• submit the required annual information return.

The Common Reporting Standard (CRS) governs the collection of financial account and tax-related information and its global exchange between international regulatory bodies. The regulation sets out the scope of financial information that financial institutions must collect and report, as well as the due diligence procedures that those financial institutions must follow.

CRS was developed by the Organisation for Economic Co-operation and Development (OECD) and established in the United Arab Emirates in 2017.

Emmanuel Givanakis, chief executive officer of the FSRA at ADGM, said: “ADGM is committed to complying with international standards. The FSRA actively supports the UAE’s commitment to international tax information exchange as part of a broader national agenda to enhance financial transparency.

“We achieve this through maintaining a robust supervisory framework and enforcement regime. Compliance with the requirements of the CRS is a top priority of the FSRA, as it aligns with our objective to promote and enhance the integrity of the ADGM financial system. We are steadfast in our commitment to take regulatory action against practices intended to circumvent tax reporting.”

Not all bad news

Although the fines are a necessary punishment for failing to adhere to regulations, ADGM has also shed light on more positive news for its ecosystem in February. It announced a Memorandum of Understanding (MOU) with the Solana Foundation, a non-profit organisation dedicated to decentralisation, adoption, and security on Solana network. The partnership will enhance distributed ledger technology (DLT) solutions and advance blockchain innovation in the region.

Hamad Al Mazrouei, CEO of ADGM Registration Authority said: “Our strategic alliance with the Solana Foundation marks a key milestone in cementing ADGM’s leadership in the blockchain sector, and represents a direct reflection of the effectiveness of our DLT Foundations Framework and our commitment to the growth and the development of the blockchain sector.

Furthermore, in February, Deus X Capital, a $1billion family-office backed investment and operating company and Bridgetower Capital, a provider of digital asset and blockchain infrastructure with $800million AuD, partnered to create Bridgetower Middle East (ME). Based in ADGM, the platform will also offer private equity/venture building facilitation, to support and grow the blockchain digital asset ecosystem in the UAE region.

Abu Dhabi Global Market (ADGM), the international financial centre, has teamed up with Solana Foundation, to enhance distributed ledger technology (DLT) solutions and advance blockchain innovation.

The partnership between ADGM and the Solana Foundation is a step towards advancing ADGM’s goal of becoming a leading centre for technology-driven financial services. This collaboration builds upon the pioneering DLT Foundations Regulations introduced by ADGM, which establish a groundbreaking framework tailored for Blockchain Foundations and Decentralised Autonomous Organisations.

Through this collaboration, ADGM aims to enhance its current portfolio by delving into potential joint ventures and ventures with the Solana Foundation. Together, they will explore various opportunities aimed at fostering the growth of the blockchain industry ecosystem in Abu Dhabi.

Key milestone

Hamad Al Mazrouei, CEO of ADGM Registration Authority, said: “Our strategic alliance with the Solana Foundation marks a key milestone in cementing ADGM’s leadership in the blockchain sector, and represents a direct reflection of the effectiveness of our DLT Foundations Framework and our commitment to the growth and the development of the blockchain sector.

“We are excited to partner with Solana to pioneer the future of technology, and further enhance the level of knowledge in the space of blockchain by emphasising the value of regulation and compliance in ensuring robust and sustainable development. We are confident that this significant collaboration will lead to bolstering the blockchain ecosystem and driving further innovative initiatives in Abu Dhabi and the UAE.”

The UAE has emerged as a global hub for innovation and adoption of blockchain technology, Lily Liu, president of the Solana Foundation, also added. “Working closely with ADGM is a significant step forward in the continued growth of blockchain adoption in the region as a whole, and advances the Solana Foundation’s goal of fostering innovation, security, and widespread adoption on the Solana network in the Middle East.”

This collaboration aims to encourage industry engagement and feedback in order to evolve regulatory frameworks as well as support the growth of Abu Dhabi’s blockchain and Web3 ecosystem.

Digital payments company Visa has teamed up with TECH5, a biometrics and digital identity management company, to focus on the development and enhancement of digital government ecosystems on a global scale.

The two organisations will collaborate on creating a comprehensive plan that encompasses various initiatives and projects aimed at establishing a strong foundation for advancing digital payments, digital identity management as well as other services within the ecosystem.

The partnership agreement includes:

• Designing and implementing improved digital government ecosystems in selected countries
• Developing and supporting the go-to-market roadmap for a superapp as well as enabling Visa card credentials for citizens and non-residents through multiple digital channels
• Formulating a roadmap to expand card acceptance for government disbursements and payment programmes across all platforms
• Initiating programmes for financial literacy as well as digital inclusion
• Cooperating in the preparation of regulatory acts for digital payments development

The collaboration

Shahebaz Khan, senior VP, head of commercial and money movement solutions, Visa CEMEA, said: “Our joint efforts will concentrate on enhancing digital government ecosystems worldwide, with a special focus on advancing digital payments and digital identity management services. We are committed to digital and financial inclusion, and we believe that this partnership will allow to implement digital ID-based payment infrastructure and services on a national level, thereby unlocking significant market potential.”

TECH5 provides a global suite of technology components and identity wallet infrastructure, encompassing biometric SDKs and software platforms designed for contactless biometric capture and matching, digital ID issuance, and management. These solutions integrate with Visa payment services and other supplementary elements critical to establishing digital public infrastructure and e-commerce marketplaces.

“We are looking forward to this strategic collaboration with Visa, learning from their invaluable expertise and market knowledge, and jointly developing the next-generation digital identity solutions powered by SSI-based Digital Identity Wallets, with a specific focus on government payment digitisation,” Machiel van der Harst, TECH5’s co-founder and CEO, also commented.

“The TECH5 team is delighted to bring to this partnership deep understanding and implementation expertise of Foundational ID projects at a national level, as well as technology components and infrastructure that support biometric matching, digital ID and identity wallet solutions for frictionless and secure payments.”

In the race for market supremacy among artificial intelligence (AI) firms, a coalition of technology leaders spearheaded by IBM and Meta established the AI Alliance. Rather than competing, these companies aim to collaborate, emphasizing their commitment to fostering transparent innovation and responsible development in artificial intelligence.

In a joint statement, IBM and Meta outlined the AI Alliance’s objectives, emphasizing a commitment to safety, collaboration, diversity, economic opportunity, and universal benefits. The alliance, they noted, encompasses a collective annual research and development investment exceeding $80 billion.

While numerous members endorse open-source development, it’s important to note that adherence to this model is not obligatory for membership. Over 50 tech companies, such as AMD, Dell Technologies, Red Hat, Sony Group, Hugging Face, Stability AI, Oracle, and the Linux Foundation, unite with IBM and Meta in the AI Alliance.

“The progress we continue to witness in AI is a testament to open innovation and collaboration across communities of creators, scientists, academics, and business leaders.”

According to IBM and Meta, the AI Alliance will create a governing board and technical oversight committee focused on advancing AI projects and setting standards and guidelines. The alliance aims to collaborate with governments, non-profits, and non-government organizations (NGOs) operating in the AI sector.

“The AI Alliance brings together researchers, developers, and companies to share tools and knowledge that can help us all make progress whether models are shared openly or not,”

Looking to engage the academic community, the AI Alliance also includes several educational and research institutions, including CERN, NASA, Cleveland Clinic, Cornell University, Dartmouth, Imperial College London, University of California Berkeley, University of Illinois, University of Notre Dame, The University of Tokyo, and Yale University.

While Meta has advocated for open-source AI models and responsible development, the company opted to decentralize and streamline AI development by disbanding its responsible AI team in November.

Related: Meta’s AI boss says there’s an ‘AI war’ underway, and Nvidia is ‘supplying the weapons’

Prominent AI developers, including Microsoft, Google, OpenAI (developer of ChatGPT), and Anthropic (Claude AI), are conspicuously missing from the AI Alliance. Instead, they established their own initiative, The Frontier Forum, dedicated to responsible AI in July.

Earlier this year, the Biden Administration engaged in discussions with major AI developers to commit to responsible artificial intelligence development. Signatories included OpenAI, Microsoft, Google, Amazon, Anthropic, Meta, and Inflection. Subsequently, in September, NVIDIA, IBM, Scale AI, Adobe, Palantir, Salesforce, and Stability AI joined the pledge.

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