Stablecoin issuer Circle Internet Group has been granted financial services permission by Abu Dhabi authorities, as it moves to support the development of the digital asset in the UAE.
The FSP will allow the New York-based company to operate as a money services provider at Abu Dhabi’s financial centre ADGM, whose Financial Services Regulatory Authority granted the licence, Circle said in a statement on Tuesday.
Circle will now be "positioned to expand regulated payment and settlement use cases in the UAE for businesses, developers and financial institutions", the company said. It will also help Circle boost its regional expansion plans, as it seeks to partner with more financial entities in the UAE and other markets in the Middle East and Africa, it added.
The push will be led by its newly appointed MEA managing director Saeeda Jaffar, a former senior vice president from global payments company Visa.
"The [ADGM's] framework sets a high bar for transparency, risk management and consumer protection – standards that enable trusted stablecoins to power real-world payments and finance at internet scale," said Jeremy Allaire, co-founder, chairman and chief executive of Circle.
A stablecoin is a type of cryptocurrency pegged to a fiat currency and tends to be less volatile, unlike crypto such as Bitcoin, for which swings are easily influenced by simple factors such as social media posts and hype.
Unlike legacy financial institutions that require paperwork, approvals and physical branches, stablecoins only require an internet connection and a digital wallet. This removes barriers and allows anyone, anywhere, to send, receive and store money without needing a bank.
The UAE has been working to draw up frameworks for stablecoins and other digital currencies, signalling that utility, clarity of regulation and institutional adoption are critical for their success.
AE Coin was the first regulated digital currency granted final approval by local authorities. Tether, whose USDT is the world's biggest stablecoin, also received approval to develop a stablecoin in the UAE. Circle, which last year incorporated a unit in Abu Dhabi, partnered with Binance in December to incorporate USDC into products that can be used locally.
In April, Abu Dhabi entities IHC, ADQ and First Abu Dhabi Bank announced plans to launch a dirham-backed stablecoin – AE Coin – which was to be fully regulated by the UAE Central Bank.
On Monday, Binance, the world’s largest cryptocurrency exchange, received the FSRA's formal approval for its global platform, as Abu Dhabi continues to strengthen its oversight of the sector.
In June, Circle president Heath Tarbert told The National that the UAE has played a vital role in helping US regulators frame digital asset policies, reflecting the growing influence of the Emirates in the global technology stage.
