#AbuDhabiStablecoin Abu Dhabi Global Market (ADGM) has established a comprehensive regulatory framework for stablecoins, specifically focusing on "fiat-referenced tokens" (FRTs). This framework, introduced by the Financial Services Regulatory Authority (FSRA) of ADGM, aims to provide a robust structure for the issuance and management of stablecoins, emphasizing stability, transparency, and investor protection. The regulations classify FRT issuance as a distinct regulated activity, imposing strict compliance requirements on issuers. These include maintaining full reserve backing in high-quality liquid assets denominated in the same fiat currency, implementing robust governance protocols, and ensuring transparent operational practices.

The FSRA's framework explicitly permits the issuance of USD-backed FRTs that meet stringent reserve and compliance standards. Notably, algorithmic stablecoins, which rely on algorithms for price stability, are prohibited within ADGM due to their perceived instability. While income earned from reserve assets can be distributed to FRT holders, these tokens cannot be marketed as investment or savings products. This regulatory clarity positions ADGM as a forward-thinking jurisdiction in digital finance, balancing innovation with necessary safeguards to foster user trust and market stability in the stablecoin ecosystem