Tether’s USDT is now an accepted virtual currency within the Abu Dhabi Global Market, as the move marks the United Arab Emirate’s latest push to bolster the gap between traditional and decentralised finance. Announced on December 10, the development opens up doors for USDT-based services to be developed for entities authorised by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Markets (ADGM). Founded in 2015, the ADGM is an international financial hub located on Al Maryah Island governed by its own legal and regulatory framework. It offers a business-friendly environment with perks like tax incentives to stimulate innovation alongside economic growth. As of March 2024, the ADGM was home to approximately 1,825 active firms spanning diverse sectors, including prominent names such as Brevan Howard, Ardian, Goldman Sachs, BlackRock , SBI Capital, the Asian Infrastructure Investment Bank, Apollo, and Vibrant Capital. Now, these firms will be able to utilise and offer pre-approved services related to USDT across the Ethereum, Solana, and Avalanche blockchain networks. With a market capitalisation of over $138 billion and accounting for the largest market share , USDT is expected to drive economic progress and digital transformation in the region. According to Tether CEO Paolo Ardoino, the approval as an accepted virtual asset will enable “new doors for collaboration and growth across the Middle East.” He applauded the United Arab Emirates’s (UAE) “forward-thinking approach” and benchmark regulations, which have positioned the nation as one of the biggest and fastest-growing cryptocurrency hubs in the world. UAE fosters stablecoin adoption The UAE has encouraged stablecoin adoption by allowing licensed issuers to deploy dirham-pegged stablecoins. Tether itself is developing one such stablecoin via a joint venture with Phoenix Group PLC, a UAE-based tech giant, and Green Acorn Investments Ltd. The stablecoin would act as a hedge against currency devaluation and allow cheap cross-border remittance. The AE coin , a stablecoin developed by the Central Bank of the UAE, was granted in-principal on December 10 as a part of the nation’s effort to regulate the stablecoin sector. Earlier this year, stablecoin issuer Paxos launched a yield-generating stablecoin called the Lift Dollar (USDL) via its global arm Paxos International, which is also regulated by the FSRA. However, on an international level, stablecoin adoption is facing a lot of hiccups as certain regulators are concerned about the various risks to the economy such assets pose following incidents like the implosion of Terra USD, which saw billions of dollars worth of value wiped out from the market in a very short time frame. Tether faces backlash Recently, the United States Financial Services Oversight Council (FSOC) raised concerns about the monopoly within the global stablecoin market, the lack of transparency, and poor risk management standards across issuers. While the FSOC did not name any specific firm, it said that the market was dominated by a single firm accounting for “around 70 per cent of the sector’s total market value,” hinting at Tether. To mitigate risks, the council called for prompt regulations, warning that several issuers were operating “outside of, or in noncompliance with, a comprehensive federal prudential framework.” The post Tether’s USDT gains approval for regulated services in Abu Dhabi appeared first on Invezz
