Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA) designated Tether’s USDT as an Accepted Fiat-Referenced Token (AFRT), authorizing regulated ADGM entities to use USDT for trading, custody and institutional settlements.
The FSRA’s AFRT label permits licensed firms within ADGM to engage in regulated activities using USDT, including exchange trading, custody services and settlement functions, according to the FSRA framework. A stablecoin is a digital asset pegged to a fiat currency to reduce price volatility. This approval broadens prior, limited recognitions on Ethereum, Solana and Avalanche to include Aptos, Celo, Cosmos, Kaia, Near, Polkadot, Tezos, TON and TRON, increasing on‑chain coverage for institutional workflows.
The FSRA move followed related ADGM decisions that also recognized Ripple’s RLUSD as an AFRT and granted full authorizations to major crypto firms, illustrating a coordinated regulatory push to integrate regulated private stablecoins into market plumbing. For market operators, the designation removes an important legal friction point: ADGM-licensed venues and custodians can now design products and settlement rails that explicitly use USDT under the jurisdiction’s rulebook.
Market data and implications for institutions and traders
Market data cited in recent reports places USDT’s market capitalization in the range of $155–160B and notes reported profits exceeding $10B for the first three quarters of 2025, figures that underscore the token’s scale and the institutional interest it attracts. Paolo Ardoino, CEO of Tether, said the recognition “reinforces the role of stablecoins as essential components of today’s financial landscape,” reflecting the issuer’s framing of the decision as legitimacy for institutional use.
For traders and derivatives desks, the immediate operational implication is clearer legal footing for using USDT as a settlement unit across more chains, which can reduce counterparty and operational risk when properly integrated with regulated custodians. For corporate treasuries and asset managers, the AFRT status enables design of settlement and liquidity-management strategies that rely on USDT within ADGM’s regulated entities, subject to those firms’ internal risk controls and compliance procedures.
Interoperability gains—the ability to move the same fiat-referenced token across multiple networks—should reduce settlement latency and frictions tied to correspondent banking corridors in cross-border flows. However, the effective risk reduction depends on counterparties’ custody practices, liquidity on individual chains and how ADGM-licensed firms implement on- and off‑ramp controls.
ADGM’s AFRT designation for USDT formalizes a wider and multi-chain institutional utility for the stablecoin within a major Middle Eastern financial centre, tightening the regulatory pathway for compliant market usage. The practical test now is adoption by ADGM‑licensed firms and the operational integration of multi‑chain USDT into regulated trading, custody and settlement workflows.
