In a strategic move for the Middle East financial ecosystem, Tether has secured a pivotal milestone in the Abu Dhabi International Financial Centre. Cryptocurrency regulation in the region is advancing steadily following the announcement made this Monday, confirming that USDT has been formally recognized as an “accepted fiat-referenced token.” This recognition allows licensed companies in the Abu Dhabi Global Market (ADGM) to incorporate the world’s largest stablecoin into their regulated services.
Paolo Ardoino, CEO of Tether, celebrated the decision stating that this designation reinforces the role of stablecoins as essential components of today’s financial landscape. The measure opens the door for institutions to offer custody, trading, and settlement using USDT, facilitating its use in remittances and cross-border payments. The ADGM, known for being a free economic zone and an international-caliber financial hub, thus consolidates itself as a magnet for digital asset companies seeking regulatory clarity.
Previously, the regulator had already classified USDT as an accepted virtual asset across its issuances on the Ethereum, Solana, and Avalanche networks. However, this new recognition significantly expands the operational framework, boosting the asset’s usability for institutional settlement. This step is crucial for integrating stablecoin liquidity within traditional financial structures under strict and transparent supervision.
Will the UAE become the definitive hub for global stablecoins?
This development is not an isolated event, but part of a broader trend where Abu Dhabi seeks to lead the digital economy through stablecoin adoption. Recently, local regulators also approved RLUSD, Ripple’s dollar-pegged stablecoin, under the same classification of accepted fiat-referenced token. These actions demonstrate a proactive approach to attracting institutional capital and fostering financial innovation in the region.
Concurrently, expectations are building around an initiative backed by some of the emirate’s largest financial players. A consortium including ADQ —the sovereign wealth fund—, International Holding Company, and First Abu Dhabi Bank, has announced plans to launch a dirham-pegged stablecoin. This project, pending approval from the UAE Central Bank, underscores the competition and interest in developing robust local payment infrastructures.
The global stablecoin market, valued at over $300 billion, has experienced explosive growth over the past two years. Abu Dhabi and the UAE more broadly have emerged as key players thanks to a relatively clear cryptocurrency regulation framework. The ADGM has become a central venue for licensing exchanges and custodians seeking to operate with legitimacy and legal security.
Looking ahead, the formal integration of USDT into Abu Dhabi’s regulated system could catalyze further institutional adoption in the MENA (Middle East and North Africa) region. It will be interesting to observe how other financial hubs react to this model of controlled openness. The convergence between traditional finance and digital assets seems to be accelerating, with stablecoins acting as the main bridge for this transformation.
