Originally published on: December 10, 2024
Abu Dhabi Global Market’s Financial Services Regulatory Authority has given its official nod to Tether’s USDt stablecoin, recognizing it as an accepted virtual asset (AVA).
This approval allows licensed financial service providers in ADGM to offer USDT-related services, paving the way for its seamless integration into regulated financial systems.
The recognition covers USDT issued on various blockchains such as Ethereum, Solana, and Avalanche, aligning with the UAE’s ambition to establish itself as a prominent digital finance hub.
Boasting a market capitalization exceeding $138 billion, USDT’s AVA status solidifies its position as the largest stablecoin in the industry.
ADGM’s decision underscores the growing importance of stablecoins in bridging the gap between traditional finance and digital asset markets.
By incorporating USDT into its regulatory framework, ADGM aims to enhance its reputation as an innovative financial hub, supporting economic diversification in the UAE.
While stablecoins have been making inroads into traditional finance through carefully regulated measures, some regulators remain wary about their integration.
The US Financial Services Oversight Council has highlighted that stablecoins, including Tether, pose risks to financial stability due to insufficient risk management protocols.
In light of these concerns, the FSOC has called for stronger risk management standards to address vulnerabilities like exposure to bank runs and systemic risks.
Recently, Tether minted over $5 billion into the market within a span of 72 hours, sparking discussions about its impact on the crypto market.
This minting spree, detailed by blockchain analytics platform Spot On Chain, coincided with Bitcoin reaching a record high of $76,200, driving USDT’s market cap to $138 billion following the ADGM’s approval.
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