Circle Responds to Abu Dhabi’s Proposed Regulatory Framework for Fiat-Referenced Tokens

Circle recently expressed strong support for the initiative by Abu Dhabi’s financial regulator to introduce a regulatory regime for the issuance of fiat-referenced tokens (FRTs). Circle commended how the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) is engaging with the private sector through an open consultation process before finalizing the regulatory framework.

Circle’s response to the ADGM consultation highlighted the necessity of establishing specific regulatory standards for FRTs, including standards for reserve management and composition. Such standards are crucial for enabling the potential of digital currencies in the real economy. Circle also underscored the importance of creating a clear regulatory path for global issuers to market their tokens within the ADGM in a compliant manner, suggesting that this path should be based on the recognition of regulatory regimes in other major financial jurisdictions to foster cross-border alignment and global coordination on stablecoin rules.

The ADGM has the potential to become a leading jurisdiction for both local and global issuers of stablecoins. Circle appreciates the opportunity to provide feedback and looks forward to continued constructive engagement with the FSRA. Circle’s detailed response also included answers to the consultation questions, addressing various aspects of the proposed regulatory framework, such as the definition of FRTs, reserve investments, redemption requests, and capital requirements.

Circle's response to the ADGM consultation reflects our company’s commitment to responsible financial services innovation and constructive engagement with regulators worldwide. Circle advocates for a regulatory framework that balances innovation with consumer protection and financial stability, ensuring that the benefits of digital currencies can be realized in a safe and efficient manner around the world.