The key conclusion in one sentence: Abu Dhabi is using 'sovereign capital × predictable financial regulation (ADGM/FSRA) × the judicial certainty of English common law' to pull the cryptocurrency industry from a 'wildly growing internet narrative' into a 'financial infrastructure narrative that can be allocated on a large scale by institutions.'
1. What exactly is this wave of 'new battleground'?
Over the past two years, the global migration routes of cryptocurrency companies have undergone subtle changes:
Relying solely on low tax rates is no longer sufficient: exchanges, stablecoins, custody, market making, and clearing all require a 'compliance channel' that can connect with banks and institutional clients.
Relying solely on market enthusiasm is not enough: institutions require a regulatory framework that is 'sustainable, auditable, and accountable', as well as an enforceable judicial system.
In this context, Abu Dhabi (especially Abu Dhabi Global Market, ADGM) offers a combination of strategies:
Capital side: Sovereign/state-owned background funds continue to enter the market ('ample funds, long duration, willing to back infrastructure');
Regulatory side: The FSRA of ADGM treats virtual assets as 'financial activities' to regulate, with rules resembling 'extensions of traditional finance,' rather than 'exceptions for technological innovation';
Judicial side: ADGM directly applies the English common law system, making contracts and dispute resolution more familiar to London/Singapore.
2. Why Abu Dhabi, and not somewhere else?
2.1 The strategy of 'sovereign funds': not just investment, but also 'building ecosystems'
In March 2025, Reuters reported that Abu Dhabi investment firm MGX invested $2 billion in Binance (paid in stablecoins), a scale that is extremely rare in the industry.
The significance of such funds is not just 'giving money', but more like doing three things:
Providing compliance endorsement: making global partners willing to sit down and talk (banks, payment, institutional LP);
Providing business entry: connecting local financial networks and large clients;
Providing policy signals: telling the market 'this is not short-term speculation, but rather a national industrial direction'.
2.2 ADGM's 'rules are predictable': more like a real international financial center
ADGM officially describes its jurisdiction covering Al Maryah and Al Reem Islands, and emphasizes direct applicability of English common law to align with international best practices.
This kind of 'rule of law certainty' is particularly crucial for institutions: custody contracts, clearing defaults, client asset segregation, and bankruptcy disposition all require an enforceable framework.
2.3 Regulatory granularity: stablecoins, custody, staking, and FRT (fiat-pegged tokens) are gradually being included
In September 2025, the ADGM FSRA released a consultation document on 'virtual asset staking,' explaining its inclusion of new businesses within regulatory boundaries.
In early December 2025, ADGM's regulatory actions regarding 'fiat-pegged tokens/stablecoins' have become more frequent:
Circle obtained ADGM FSRA's Financial Services Permission (Money Services Provider), advancing its expansion into the Middle East;
Tether USDT is recognized as ADGM's 'Accepted Fiat-Referenced Token (AFRT)', and has expanded to multiple chain usage scenarios.
These actions collectively point in one direction: upgrading stablecoins from 'on-chain chips' to 'settlement tools legally usable by financial institutions'.
3. Three recent cases: Abu Dhabi's 'cryptofinancialization' is happening
Case A: Binance's 'regulatory repositioning' in Abu Dhabi
In early December 2025, several media outlets reported that Binance made key authorization/license progress under the ADGM framework;
Binance itself has publicly disclosed: its Binance (AD) Limited has obtained a financial services license (FSP) from the FSRA, focusing on custody and other regulated businesses.
This means that Binance, in terms of 'regulatory structure', resembles a financial institution rather than just an internet platform.
Case B: Circle (USDC) obtained ADGM license: the 'compliant payment' route for stablecoins
CoinDesk reported that Circle obtained a license from ADGM and can operate as a Money Services Provider.
The significance of stablecoin companies obtaining licenses is:
Payments/settlements can be more compliantly embedded in the processes of enterprises and financial institutions;
Institutional clients' requirements for 'issuer governance, reserve management, and compliance auditing' are easier to align.
Case C: USDT included in 'Accepted Fiat-Referenced Token (AFRT)': the 'mainstreaming' of stablecoins
Tether's official announcement states that USDT has been recognized by ADGM as AFRT and has expanded to multiple mainstream chains.
These 'stablecoins recognized by regulatory agencies' will bring more realistic implementations: cross-border payments, corporate settlements, and asset support and risk control processes from custody institutions.
4. How will this trend impact the cryptocurrency market?
4.1 Industry structure: moving from 'exchange-centered' to 'custody + settlement + compliance channel center'
When stablecoins, custody, market-making, and clearing all begin to have 'financial licenses' framing them, the industry's profit pool will shift from:
Trading fees during high volatility periods
Transition
Long-term 'channel fees': custody fees, clearing fees, settlement service fees, institutional market-making, and financing cost advantages.
4.2 Asset narrative: more favorable for 'infrastructure-related' and 'compliance-usable' targets
It's difficult to predict how short-term prices will behave, but in the medium to long term, the direction that is more likely to benefit is:
Stablecoin ecosystem (payment, settlement, compliant issuance and custody)
RWA/tokenization (bonds, fund shares, notes, etc.)
Institution-level derivatives and clearing infrastructure
Compliant trading and custody platform
4.3 Geopolitics and regulation: risks remain, but 'negotiable space' is larger
Abu Dhabi's advantage is 'more willing to provide a clear path', but it does not mean 'unlimited leniency'.
For example, ADGM's regulation emphasizes AML/KYC, compliance transparency, and risk assessment of business models. If significant compliance events occur in the future, rules will tighten quickly.
Reference Source
Reuters: MGX invested $2 billion in Binance (2025-03-12)
FT: Background interpretation of MGX's investment in Binance (2025-03-12)
ADGM: Our Jurisdiction / English Common Law relevant description
ADGM: FSRA Staking Consultation Document and Announcement (2025-09-30)
CoinDesk: Circle obtained ADGM FSRA license (2025-12-09)
Tether: USDT is recognized as ADGM AFRT (early December 2025)
UAE Federal Tax Authority: Free Zone Persons corporate tax guide (2024-05-01)
