The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has published Consultation Paper No. 7 of 2024, proposing a new regulatory framework to allow the issuance of Fiat-Referenced Tokens (FRTs) in ADGM and seeking public feedback.

FRTs are stablecoins backed by high-quality, liquid assets in the same currency, designed for use as payment and sharing characteristics with Stored Value.

Since 2018, the FSRA has updated its regulatory approach to digital assets, and now plans to specifically regulate FRTs.

The FSRA proposes a risk-based approach to FRT issuance, with regulatory requirements and safeguards aligned with leading practices. FRT issuance will be a new Regulated Activity, distinct from Stored Value under the Financial Services and Markets Regulations 2015 (FSMR), with relevant conduct and prudential rules.

The consultation period ends on 3 October 2024. For more information, please refer to the link below.