The local watchdog recognised Ripple’s dollar-pegged stablecoin as an Accepted Fiat-Referenced Token, allowing institutions in Abu Dhabi to utilise it.
Ripple said on Thursday that the clearance permits regulated companies to use Ripple USD (RLUSD) within the financial zone of the Abu Dhabi Global Market (ADGM), a free zone and international financial hub situated on the Al Maryah and Al Reem Islands in Abu Dhabi.
Details on the deal
“With a market capitalisation of over $1 billion and growing adoption in core financial uses like collateral and payments, RLUSD is quickly becoming a go-to USD stablecoin for major institutions,” said Jack McDonald, senior vice president of stablecoins at Ripple.
The Financial Services Regulatory Authority, which is in charge of the ADGM, gave its approval. According to the ruling, businesses with regulatory licenses may utilise RLUSD for approved purposes as long as they adhere to the reserve management and disclosure criteria associated with fiat-referenced tokens.
As part of its efforts to increase digital-asset services in the United Arab Emirates, Ripple announced in October 2024 that it was applying for a license from the Dubai Financial Services Authority (DFSA). Later that month, the company received in-principle permission.
To provide cross-border cryptocurrency payment services within the Dubai International Financial Centre (DIFC), a significant free economic zone with its own regulatory framework, the business announced in March that it had gained a complete regulatory license.
More developments
The DFSA authorised RLUSD for usage by businesses operating inside the DIFC in June, enabling the stablecoin to be utilised for regulated tasks, including treasury management and payments.
Additionally, Ripple has registered Zand Bank and the fintech startup Mamo as early adopters of its blockchain-based payment stack, Ripple Payments, in the United Arab Emirates.
The New York Department of Financial Services approved a limited-purpose trust charter for RLUSD, which was introduced in late 2024. It is completely backed by cash and equivalents and is tied 1:1 to the US dollar.
A collaborative partnership to provide institutional custody for XRP and Ripple USD was announced earlier this year by Ripple and BDACS, a well-known institutional custody company for digital assets in Korea.
Additionally, the UAE enacted a comprehensive new central bank regulation that formally regulates a large portion of the Web3 industry as well as decentralised finance (DeFi).
Also Read: Ripple USD Gains Official Recognition as a Crypto Token Under Dubai’s DFSA Regulatory Framework