Tether’s USDT Stablecoin Now Accepted As Payment In Abu Dhabi’s ADGM Freezone

The Abu Dhabi Global Market (ADGM) has officially recognized Tether’s USD stablecoin, USDT, as an Approved Fiat-Reference Token (AFRT) for use across a wide range of blockchains, marking a regulatory milestone for the world’s largest stablecoin and most traded cryptocurrency. 

It opens the door for licensed institutions in the United Arab Emirates to use the dollar-pegged crypto for regulated on-chain services, accelerating the country’s push to position itself as a global epicenter for fintech and digital assets.

Abu Dhabi Approves USDT as a Fiat-Referenced Token For Cross-Border Payments, Institutional Custody, and Settlement

In a statement released on Monday, the stablecoin giant announced that the recognition allows authorized persons licensed by the ADGM’s Financial Services Regulatory Authority (FSRA) to conduct regulated activities involving USDT across Aptos, Celo, Cosmos, Kaia, Near, Polkadot, Tezos, TON, and Tron blockchains.

ADGM is an international financial center and free economic zone located in the UAE capital, which has become a hub for digital asset companies seeking clear rules and institutional access to the crypto market. FSRA oversees the licensing and supervision of virtual asset activities, with a focus on supporting innovation while maintaining strong compliance and investor protection.

This recognition expands on a December 2024 ruling by the FSRA that classified USDT as an accepted virtual asset (AVA) within the economic free zone, allowing licensed companies to use the stablecoin on Ethereum, Solana, and Avalanche networks to facilitate cross-border payments, institutional custody, and settlement.

Monday’s development means institutions in Abu Dhabi are now cleared to use USDT across nearly all major blockchains it is issued on, further strengthening Tether’s global compliance. This also boosts the stablecoin’s usability across the global financial system, as it can now function as a reliable settlement asset for trading and decentralized applications, while maintaining the AFRT criteria and safeguards required by the ADGM.

Tether’s ongoing collaboration with ADGM aligns with the UAE’s national strategy to integrate blockchain technology into its financial system. The company believes that USDT’s inclusion within this framework enhances the liquidity, interoperability, and diversity of blockchain infrastructures available to users and institutions operating in the Middle East.

Paolo Ardoino, CEO of Tether, lauded the government for setting the global standard for digital asset regulation, stating that his company is “proud” to contribute its industry leadership. He said that the recognition demonstrates both Tether’s and ADGM’s commitment to advancing financial inclusion and innovations through regulated digital asset instruments.

RLUSD and USDC Receive Approval for Regulated Institutional Use Cases in the UAE

USDT is the latest addition to the FSRA’s official AFRT list of accepted stablecoins, which includes Ripple’s RLUSD, World Liberty Financial’s USD1, Circle’s USDC, and Paxos’s USDG, USDP, and USDL coins.

Late last month, Ripple’s dollar-pegged stablecoin RLUSD was cleared for use by regulated institutions in the ADGM for activities tied to fiat-reference tokens, such as reserve management and disclosure obligations. In March, the company received full regulatory approval from the Dubai Financial Services Authority (DFSA) to expand its digital asset services in the country. 

This recognition allowed Ripple to offer cross-border crypto payment services inside the Dubai International Financial Centre (DIFC), another major economic free zone in the UAE. By July, RLUSD was cleared for use by companies based in the DIFC for payments and treasury management. Ripple also signed exclusive partnerships with Zand Bank and fintech app Mamo to adopt its XRPL network-based payments stack, Ripple Payments.

Ripple launched RLUSD in December 2024, and within a year, it has already become the 8th-largest stablecoin by market cap, with $1.02 billion worth of tokens currently in circulation.

Meanwhile, Circle Internet Group secured a Financial Services Permission (FSP) license from the FSRA to operate as a Money Services Provider (MSP) inside the Abu Dhabi freezone. This license will allow the company to offer USDC for business payments, settlements, and other digital asset-related financial services.

Earlier this year, USDC and its euro-pegged counterpart, EURC, were recognized by the DFSA. Circle’s stablecoin is the second-largest by market cap, with an estimated $78.3 billion worth of tokens currently in supply. Tether’s USDT remains the largest stablecoin, with a market $185.72 billion.

These developments highlight how stablecoins, especially those pegged to the U.S. dollar, are increasingly becoming part of the global financial system, as the Trump administration’s pro-crypto policies have resulted in various governments establishing guardrails to accommodate the $300 billion asset class.

The UAE, especially its Emirates of Abu Dhabi and Dubai, has emerged as a key player in stablecoin and digital asset markets, thanks to a relatively clear regulatory framework and the advantage of already being a global hub of commerce. ADGM and DIFC are popular venues for crypto-focused firms such as exchanges and custodians seeking to provide their services in the Middle East and North Africa region.