Abu Dhabi recognizes Tether USDT as a virtual asset

Abu Dhabi Global Market (ADGM) regulators have officially recognized stablecoin Tether (USDT) as an accepted virtual asset (AVA). This may further strengthen stablecoin's position.

The ADGM, an international financial center and free trade zone on Al Maryah Island in Abu Dhabi, was established in 2013 and operational in October 2015. The center consists of three authorities: the financial services regulator, the registry office and the ADGM courts.

Since the introduction of digital asset regulations in 2018, the ADGM has become an attractive venue for crypto companies. With the recognition of USDT as a virtual asset, licensed financial service providers within the ADGM can now offer services using USDT. This should facilitate Tether's integration with other regulated financial ecosystems in the region.

This move is in line with the UAE's ambition to become a global center for digital finance.

Unlike regulators in Abu Dhabi, authorities in some other countries have raised concerns about stablecoins. For example, the U.S. Financial Services Oversight Council (FSOC) has indicated that stablecoins pose a risk to financial stability because of the lack of solid risk management standards and the high concentration in the market among some parties. A major criticism is that Tether represents about 70 percent of the total market value of the stablecoin sector.