Abu Dhabi Global Market (ADGM) has officially recognized Tether’s USDT as an Accepted Virtual Asset (AVA), marking a significant milestone in the integration of stablecoins into regulated financial ecosystems.

USDT Approved for Financial Services

The Financial Services Regulatory Authority (FSRA) of ADGM announced that licensed financial service providers in the region can now offer services involving USDT. The approval extends to USDT issued across multiple blockchains, including Ethereum, Solana, and Avalanche.

This move aligns with the UAE’s broader strategy to establish itself as a global hub for digital finance and innovation. With a market capitalization exceeding $138 billion, USDT remains the largest stablecoin in the sector.

Bridging Finance and Innovation

ADGM’s decision underscores the growing importance of stablecoins in connecting traditional finance with digital asset markets. By integrating USDT into its framework, ADGM aims to bolster its reputation as a leading financial hub while supporting economic diversification in the UAE.

Global Concerns Over Stablecoins

While the UAE embraces USDT, concerns persist globally about stablecoins’ financial stability risks. The U.S. Financial Services Oversight Council (FSOC) has highlighted vulnerabilities in the sector, citing Tether’s dominance, which accounts for approximately 70% of the total stablecoin market value.

The FSOC has called for stricter risk management measures to mitigate systemic risks and prevent scenarios like bank runs.

Tether’s Recent Market Moves

In November, Tether minted over $5 billion in USDT within 72 hours, coinciding with Bitcoin’s peak of $76,200. This surge brought USDT’s market cap from $124 billion in early November to $138 billion by December 10, following ADGM’s approval.

As stablecoins like USDT continue to gain traction, their role in shaping the future of digital and traditional financial systems remains under intense scrutiny.