#AbuDhabiStablecoin Regulatory Authority: The primary regulator for stablecoins within the Abu Dhabi Global Market (ADGM) is the Financial Services Regulatory Authority (FSRA). It has established a specific framework for Fiat-Referenced Tokens (FRTs), which are essentially stablecoins pegged to fiat currencies.
* Focus on Fiat-Referenced Tokens (FRTs): The ADGM's regulatory focus is on FRTs, defined as digital assets that:
* Serve as a medium of exchange.
* Maintain a stable value by referencing a fixed amount of a single fiat currency.
* Allow holders to redeem the token for its fiat value from the issuer upon demand.
* Prohibition of Algorithmic Stablecoins: Recognizing the inherent instability, the FSRA prohibits algorithmic stablecoins within the ADGM.
* Reserve Requirements: Issuers of FRTs must maintain full reserve backing in the same fiat currency they purport to be tokenizing. These reserves must be held in:
* Cash as "Relevant Money."
* "Reserve Investments" comprising admissible high-quality liquid assets denominated in the same currency as the FRT, which can be liquidated rapidly with minimal adverse price effect.
* Transparency and Disclosure: Issuers are required to provide clear, fair, and non-misleading disclosures about their FRTs in a white paper, which must be submitted to the FSRA before issuance.
* Capital Resources: FRT issuers must maintain minimum capital resources, independent of reserve assets, set at the higher of $2 million or 12 months of annual audited expenditure.
* Redemption Rights: The framework ensures that holders have the right to redeem FRTs at their par value within specific timeframes.
* Income from Reserve Assets: Unlike some other jurisdictions, the FSRA allows issuers to distribute income earned from reserve assets to FRT holders, provided the FRTs are not marketed as investment or savings products.
* Recent Developments:
* On April 28, 2025, Abu Dhabi-based entities International Holding Company (IHC), ADQ, and First Abu Dhabi Bank (FAB) announced plans to launch a new UAE Dirham (AED)