The Dubai-based financial centre said it was the first regulator in its region to join the consortium.

Abu Dhabi Global Market has joined a blockchain consortium spearheaded by New York-based technology start-up R3, as watchdogs worldwide grapple with the nascent technology to better understand its opportunities and risks. 

ADGM says it is the first regulatory body in the Middle East and North Africa to join the syndicate, which is comprised of more than 80 members including banks, financial institutions and regulators.

ADGM says its financial technology team will have access to the latest news and developments in blockchain and will be able to spark dialogues, share best practices, and collaborate with other firms and regulators.

Blockchain technology, a virtual distributed ledger of transactions shared peer-to-peer, can record ownership across a public network of computers rendered tamper-proof by advanced cryptography. It is already known as the platform for the controversial digital currency bitcoin, even though this is only one of several hundred applications that use blockchain technology. 

The technology is causing a stir within the financial services sector as its supporters believe it could reduce hidden expenses in the financial system by ousting inefficiencies across areas such as payments, syndicated loans and equity clearing. 

But R3's consortium faced a bout of turbulence towards the end of last year when a raft of big banks including Goldman Sachs, Morgan Stanley, Santander and National Australia Bank abandoned the project before its first round of funding. 

R3 lowered the amount it aimed to raise in its first round of equity funding from $200 million to $150 million. It planned to give members a 60 per cent equity stake in exchange for the capital.

A source close to the process at Goldman Sachs told this publication last November that the group quickly became “saturated” as new members came pouring in, which resulted in a lack of headway being made and the project's prospects eventually becoming “unrealistic”. The bank baulked at being asked to contribute to funding alongside a plethora of other investors and is subsequently exploring other blockchain models, this publication understands.

Santander, the Spanish lender, also dropped out for similar reasons, as the firm was currently testing “more relevant and more attractive” blockchain technology projects and proposals, including internal models, a source close to the matter told this publication.  

Although, according to ADGM, it is the first regulator in its region to join the consortium, other regulators from across the world are also backing the initiative.

In March, Illinois' regulator announced it was the first regulator in the US to join forces with other members of the R3 consortium.