Tether’s USDt stablecoin has been officially recognized as an Accepted Virtual Asset (AVA) by the Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority. This milestone opens doors for regulated financial services involving USDT in the UAE, aligning with the nation’s ambition to become a global digital finance hub.

USDT’s Role in Abu Dhabi’s Financial Ecosystem

The ADGM approval enables licensed service providers to integrate USDT into financial operations across multiple blockchains, including Ethereum, Solana, and Avalanche. With a market cap exceeding $138 billion, USDT solidifies its position as the leading stablecoin while bridging traditional and digital finance within the UAE.

Boosting ADGM’s Financial Innovation

This decision underscores the UAE’s commitment to economic diversification and innovation. By incorporating USDT into its framework, ADGM strengthens its stance as a global financial hub, offering regulated access to digital assets and expanding its digital finance ecosystem.

FSOC Highlights Stablecoin Risks

While USDT’s acceptance grows, concerns persist. The U.S. Financial Services Oversight Council (FSOC) warns that stablecoins like USDT, which dominate 70% of the market, lack robust risk management and could pose systemic threats, including vulnerabilities to bank runs. The FSOC advocates for stricter regulatory standards to mitigate these risks.

Tether’s recent activities highlight its market sway. In November, the firm minted over $5 billion in USDT within 72 hours, coinciding with Bitcoin’s surge to $76,200. This minting spree drove USDT’s market cap from $124 billion to $138 billion, marking a pivotal moment for the crypto sector.

With ADGM’s approval, Tether’s USDT takes a significant step toward mainstream financial integration while sparking global debates on stablecoin regulation.