#AbuDhabiStablecoin Abu Dhabi has been actively developing its regulatory framework for stablecoins, primarily through the Abu Dhabi Global Market (ADGM), its international financial center. Here's a summary of the key aspects:
Abu Dhabi Global Market (ADGM) Regulatory Framework:
* Fiat-Referenced Tokens (FRTs): The ADGM has established a specific regulatory framework for "Fiat-Referenced Tokens" (FRTs), which are a type of stablecoin pegged to a fiat currency. This framework came into effect on December 5, 2024.
* New Regulated Activity: Issuing FRTs is now a separate regulated activity within the ADGM, requiring a license from the Financial Services Regulatory Authority (FSRA).
* Definition of FRT: An FRT is defined as a digital asset that:
* Uses distributed ledger technology for transfer and storage.
* Acts as a medium of exchange.
* Maintains a stable value by referencing a fixed amount of a single fiat currency.
* Allows holders to redeem it from the issuer for the referenced fiat currency on demand.
* Reserve Requirements: Issuers of FRTs must maintain reserve assets equal to at least the par value of all outstanding tokens. These reserves must be high-quality, liquid assets denominated in the same currency as the FRT (e.g., cash, short-term government bonds). Monthly independent attestation of these reserves is required for transparency.
* Redemption Rights: FRT holders must be able to redeem their tokens at par value within two business days of a redemption request.
* Capital Adequacy: FRT issuers need to maintain a minimum level of capital resources, set at the higher of $2 million or their annual audited expenditure.
* Governance and Integrity: The framework emphasizes robust governance and operational integrity for FRT issuers.
* Transparent Disclosure: Issuers must submit a white paper to the FSRA at least 20 days before issuance, providing clear, fair, and comprehensive information that does not promote the FRT as an investment.
* Stress Testing: Issuers are required to regularly (at least .