Circle, the issuer of the USDC stablecoin, has received regulatory approval to operate as a financial service provider within the Abu Dhabi Global Market (ADGM), marking a significant step in its expansion within the United Arab Emirates. The Financial Services Permission (FSP) license, granted by the Financial Services Regulatory Authority (FSRA) of the ADGM, allows Circle to operate as a Money Services Provider in the International Financial Centre (IFC).
This move comes amid a broader push by the UAE to establish itself as a leading hub for crypto and digital asset innovation. The UAE Central Bank has been actively reviewing its cryptocurrency regulations, with a focus on fostering innovation and the digitization of the UAE's economy.
In addition to the regulatory green light, Circle has appointed Saeeda Jaffar as its managing director for the Middle East and Africa (MEA) region. Jaffar, who also serves as a senior vice president and group country manager for the Gulf Operation Council at Visa, will be responsible for developing Circle's regional strategy and partnerships.
Circle's co-founder, chairman, and CEO, Jeremy Allaire, emphasized the importance of a robust regulatory framework for stablecoins, highlighting the ADGM's high standards for transparency, risk management, and consumer protection. He stated that these standards are essential for trusted stablecoins to support payments and finance at scale.
The ADGM has recently granted licenses to several crypto companies, signaling its commitment to fostering a thriving digital asset ecosystem. Tether's USDt, the largest stablecoin by circulation, also secured a regulatory milestone in Abu Dhabi's international financial center, as did Ripple's dollar-pegged stablecoin, Ripple USD. Crypto exchange Binance recently obtained three licenses from Abu Dhabi's financial regulator, enabling it to operate its exchange, clearing house, and broker-dealer services. Bybit, another competitor, received regulatory approval in the UAE in early October.
The Central Bank of the UAE (CBUAE) issued its Payment Token Services Regulation (PTSR) to regulate stablecoin-related services in the UAE. The PTSR applies across the UAE, except in the Dubai International Financial Centre (DIFC) and the ADGM. Under the PTSR, a "Payment Token" includes stablecoins whose value references a fiat currency or other stablecoins that are denominated in the same fiat currency. The CBUAE has explicitly banned algorithmic stablecoins, which maintain value through automated supply adjustments rather than being fully backed by reserves.
The UAE's approach to stablecoin regulation reflects a preference for centralized control over digital financial assets, aiming to prevent risks associated with unregulated or volatile cryptocurrencies. All stablecoin issuers and custodians must comply with the UAE's Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) laws. A stablecoin must be fully backed by high-quality liquid assets, ensuring that every issued stablecoin is redeemable for its underlying reserve. Regular audits are required to verify asset backing and financial integrity.
Tether's USDT has received regulatory recognition as an accepted fiat-referenced token across various major blockchains within ADGM. This allows ADGM-licensed institutions to support regulated activities involving USDT across nearly all blockchains where the token circulates, forming a multi-chain foundation that enhances liquidity and interoperability for trading, settlement, and decentralized applications.
