Tether just scored a major regulatory win. Financial authorities in Abu Dhabi have formally recognized the USDT stablecoin, allowing licensed institutions to integrate the token into custody and trading operations.
The Abu Dhabi Global Market announced the designation Monday, opening the door for broader regulated access to the world’s largest stablecoin by circulation.
The recognition classifies USDT as an accepted fiat-referenced token, giving ADGM-licensed companies the ability to build services around the stablecoin. The move expands on earlier approvals that were limited to specific blockchain networks, now supporting a wider range of institutional use cases.
Tether CEO Paolo Ardoino framed the decision as validation of stablecoins’ essential role in modern finance. USDT has gained traction for international money transfers, payment settlements, and acting as a stable value store amid volatile cryptocurrency markets.
Licensed firms can now offer institutional custody, cross-border payment solutions, and settlement integration under clear regulatory oversight. The designation provides legal certainty for companies building financial infrastructure around dollar-pegged digital assets.
Ripple’s RLUSD stablecoin received similar recognition, signaling that Abu Dhabi is open to multiple stablecoin providers rather than favoring a single issuer.
Local financial players are also moving fast. A consortium including the ADQ sovereign wealth fund, International Holding Company, and First Abu Dhabi Bank announced plans to launch a dirham-backed stablecoin, pending central bank approval. This would create a locally issued alternative pegged to the UAE currency rather than the dollar.
Globally, stablecoin circulation has topped $300 billion, more than doubling in the past two years. Abu Dhabi is positioning itself as a regional hub for digital assets through regulatory frameworks that balance operational certainty with oversight. Its international financial center has attracted exchanges, custody providers, and blockchain firms seeking compliant pathways to operate.
Traditional financial services are taking notice. Banks and payment processors increasingly see dollar-pegged tokens as tools to speed up cross-border transactions and reduce settlement costs compared to conventional banking methods.
The regulatory approval comes as stablecoins move beyond serving crypto traders to supporting broader payment and treasury functions. Institutional adoption is rising as tokens demonstrate practical value in managing dollar exposure and enabling rapid, cross-border value transfers.
