Tether’s USDT approved as accepted virtual asset in Abu Dhabi

    11 Dec 2024
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    The Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority has officially recognized Tether’s USDt stablecoin as an accepted virtual asset (AVA).

    With the approval, licensed financial service providers within the ADGM can offer services related to USDT to facilitate its integration into regulated financial ecosystems.

    The recognition covers USDT issued on multiple blockchains — including Ethereum, Solana and Avalanche — and aligns with the United Arab Emirates’ strategy to become a global hub for digital finance.

    With a market capitalization exceeding $138 billion, USDT’s inclusion as an AVA strengthens its position as the largest stablecoin in the sector.

    Regulatory acceptance

    ADGM’s decision reflects the increasing role of stablecoins in bridging the gap between traditional finance and digital asset markets.

    By integrating USDT into its framework, the ADGM could strengthen its position as a financial hub for innovation and support its own economic diversification in the UAE.

    Although stablecoins have integrated with traditional finance through controlled regulatory actions, some regulators have raised concerns about the integration.

    FSOC warns about stablecoin integration

    According to the United States Financial Services Oversight Council (FSOC), stablecoins present risks to financial stability due to their lack of solid risk management standards.

    In line with the council’s perspective on stablecoins over the years, the FSOC pointed out that the market is “heavily concentrated,” with a single firm (Tether) holding roughly 70% of the sector’s “total market value.”

    The FSOC has called for stronger risk management standards to address vulnerabilities, including exposure to bank runs and systemic risks.

    Tether injects over $5 billion into the crypto market

    In November, Tether went on a minting spree, injecting over $5 billion into the market within 72 hours, spurring discussions about its influence on the crypto market.

    Data from Spot On Chain, a blockchain analytics platform, detailed the timeline of issuance events. The first $1 billion, minted on Nov. 6, coincided with Bitcoin climbing to a record high of $76,200.

    The minting event launched USDT’s market cap to around $124 billion in early November, soaring to $132 billion by Nov. 26 before finally landing around $138 billion on Dec. 10 after the ADGM approval.

    Source: https://cointelegraph.com/news/abu-dhabi-approves-tether-usdt-stablecoin

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