ADGM and Hashed warn regulators: balanced rules needed for AI and blockchain in finance
ADGM and Hashed urge balanced rules for AI and blockchain in finance, highlighting stablecoins, governance and clearer frameworks to speed institutional adoption.
A joint policy report issued by Abu Dhabi Global Market’s Registration Authority (ADGM) and Hashed Open Research sets out recommendations after a closed-door Web3 leaders roundtable held during Abu Dhabi Finance Week 2025. The report, which addresses the convergence of AI and blockchain, draws on discussions with roughly 40 senior officials from global finance, regulators and infrastructure providers. Participants explored practical steps to scale blockchain-based financial systems while managing the risks introduced by increasingly autonomous AI-driven decision-making.
Report issued after Abu Dhabi Finance Week roundtable
The report synthesizes outcomes from a high-level meeting convened during Abu Dhabi Finance Week 2025 and is framed as a policy guide for market-builders and regulators. Organizers said the aim was to surface actionable priorities where public policy can both enable innovation and protect market integrity. The paper stresses that clarity and proportionality in regulation will be crucial for institutions considering large-scale digital asset strategies.
International institutional participation and perspectives
Attendees included leaders from major institutional investors, asset managers and infrastructure firms, reflecting a cross-section of the global financial system. Representatives came from the Abu Dhabi Investment Authority, BlackRock, Franklin Templeton, Circle, ConsenSys and the Solana Foundation, alongside delegations from the European Commission and the Government of Liechtenstein. That mix of public and private voices shaped a discussion focused on operational realities rather than theoretical use cases.
Autonomous AI, operational resilience and infrastructure limits
A core finding highlights the growing use of AI systems in financial activities and the strain that more autonomous decision-making places on infrastructure designed for human oversight. Roundtable participants warned that current systems may be ill-suited for workflows where AI agents take execution and settlement actions with limited human intervention. The report therefore calls for secure, auditable and scalable platforms capable of withstanding higher degrees of automation and complexity.
Stablecoins and instant settlement seen as pragmatic entry points
Panelists identified stablecoins and instant settlement mechanisms as the most immediate, practical avenues to extend blockchain infrastructure into mainstream finance. The report argues these instruments offer a tangible route to improve settlement speed and trust in digital rails, provided they sit on well-governed platforms. At the same time, contributors cautioned that tokenisation will not deliver material benefits unless secondary-market liquidity and reliable redemption mechanisms are in place.
Regulatory, accounting and AML obstacles to large-scale adoption
Participants pointed to regulatory uncertainty as the principal barrier to institutional adoption, highlighting several specific frictions. These include differing AML/KYC requirements across jurisdictions, unclear accounting and tax treatments for digital settlement assets, and the potentially punitive capital charges under existing Basel frameworks for some crypto exposures—cited as a material deterrent. The report recommends coordinated regulatory approaches to reduce compliance fragmentation and support safer market entry.
Market redesign through tokenisation and digital agents
Roundtable contributors argued that tokenisation now extends beyond simply digitising existing instruments to reshaping market architecture, including issuance, distribution and settlement processes. They also raised the prospect that personal AI agents — described as “digital twins” in the discussions — could become primary interfaces for individuals and institutions within the digital economy. This shift would require standardized identity, authority and auditability frameworks so rights and responsibilities remain clear in automated interactions.
Calls for balanced regulation to protect markets and foster innovation
Speakers warned against overly restrictive early-stage regulation that could suppress experimentation before risks and controls are fully understood. The report advocates for calibrated regulatory frameworks that provide legal clarity and market confidence while preserving space for pilots and model testing. Authorities should prioritise governance, verifiable records and proportional oversight to enable innovation without compromising financial stability.
ADGM’s Registration Authority framed the report as part of Abu Dhabi’s effort to capture global insights while shaping the future financial landscape, underscoring the need for governance to be central to technology adoption. Hashed described the initiative as a practical step towards designing resilient digital financial infrastructure and encouraged further public-private collaboration to turn policy recommendations into operational standards.
The joint report offers a roadmap for policymakers, regulators and market participants seeking to reconcile the promise of AI and blockchain with the operational and prudential realities of global finance. It sets out near-term priorities and emphasizes that progress will depend on coordinated regulation, robust market liquidity and governance that keeps pace with technological change.
