ADGM Recognises Tether USDt as Accepted Fiat-Referenced Token, Expanding Institutional Use in UAE
Abu Dhabi Global Market (ADGM) has formally designated Tether’s USDt as an Accepted Fiat-Referenced Token (AFRT), allowing ADGM- and FSRA‑licensed firms to offer trading, custody and related regulated services for USDt across multiple blockchains. Tether said the approval followed a regulatory review demonstrating operational stability, transparency and compliance. ADGM’s decision reinforces Abu Dhabi’s position as a regulated digital-asset hub and aligns with broader UAE crypto momentum — including new Sharia-compliant in-app Bitcoin trading by Ruya bank and Chainalysis data showing over $30bn in crypto inflows to the UAE from July 2023–June 2024 (a 42% YoY rise). For traders, the recognition increases institutional on‑ and off‑ramp options, may boost USDt utility and liquidity across listed chains, and could drive higher institutional settlement and cross‑border payment flows in the region. The development also raises expectations of increased regulatory scrutiny and compliance requirements for counterparties handling USDt in ADGM.
Bullish
The ADGM designation of USDt as an Accepted Fiat-Referenced Token is likely bullish for USDT’s market utility and liquidity. Short-term effects: positive sentiment and modest demand uptick as institutional and regulated counterparties in ADGM gain clearer on‑ramp/off‑ramp pathways and may increase USDt trading and custody volume. This can tighten USDT spreads and deepen order books on regional venues and supported blockchains. Medium-to-long term: enhanced institutional adoption in a regulated hub (combined with broader UAE inflows and new on-ramps like Sharia-compliant BTC trading) should sustain higher institutional settlement and cross-border payment flows using USDt, improving liquidity and utility. Risks that could temper the bullish impact include heightened compliance burdens, potential counterparty limitations, and any regulatory changes that impose operational constraints. Overall, the immediate price impact on USDT should be limited but positive — improved utility and institutional access support liquidity and demand, which is constructive for USDT’s market function.