The Regulatory authority of ADGM in UAE publishes digital asset amendments consultation paper

The Regulatory authority of ADGM in UAE publishes digital asset amendments consultation paper

The Financial Services Regulatory Authority (FSRA) of ADGM has published Consultation Paper No. 11 of 2024 setting out proposed amendments to its regulatory framework for Authorized Persons conducting Regulated Activities involving Virtual Assets in ADGM and to seek feedback on potential changes to that framework.

The proposed amendments include revisions to the process by which Virtual Assets are accepted for use within ADGM and refinements to capital requirements and fees. The paper also seeks feedback on several questions, including questions relating to staking and other emerging business models involving Virtual Assets.

One of the proposed amendments is that now the scope of the Regulated Activity of Providing Custody under FSMR currently
encompasses Financial Instruments, VAs and Spot Commodities. As outlined above, all VAs held in custody must be AVAs. The FSRA is asking for feedback on whether authorized persons can engage in providing custody to other than AVAs and hold a broader range of digital assets. They are also asking what other digital assets could be held.

    Feedback is also sought on the criteria to be applied in determining whether non-ADGM issued Fiat-Referenced Tokens should be accepted within ADGM. The paper also proposes to expand the scope of investments in which Venture Capital Funds may invest.

    As per the consultation the FSRA does not intend to restrict acceptance to FRTs issued only by issuers located in ADGM (“Domestic FRTs”). However, the FSRA notes that FRTs issued by issuers outside ADGM (“Foreign FRTs”) may not be subject to standards as
    stringent as those applied to Domestic FRTs. Given this, Foreign FRTs approved as Accepted FRTs for use within ADGM will be
    categorised as such to distinguish them from Domestic FRTs, which are subject to FSRA standards.

    The consultation adds, all Authorized Persons that use Foreign FRTs in conducting Regulated Activities will have to disclose to their Clients that such Accepted FRTs are not subject to the FSRA’s requirements for issuers of Domestic FRTs.

      The consultation period will close on 31 January 2025.

      The new consultation paper came out on the same day that ADGM issued its fiat-referenced-tokens framework, better known as its stablecoin regulations.

      The new framework expands the suite of digital assets already offered by ADGM regulatory authority.
      As per the press release, the framework introduces several key components that establish robust standards for FRT issuers to ensure financial stability and investor protection such as reserve assets, governance and integrity, transparent disclosure, prudential safeguards and redemption rights.


      The framework makes FRT issuance a distinct Regulated Activity within ADGM’s comprehensive financial services regulatory regime. It has been designed to be risk-proportionate while ensuring FRT issuers operate in a safe and prudent manner.


      Emmanuel Givanakis, CEO of the ADGM FSRA stated, “Our FRT framework is a significant milestone in ADGM’s evolution as a progressive international financial centre. Through extensive consultation with industry stakeholders, we have created a regime that balances innovation with strong regulatory oversight. This framework provides the regulatory certainty that industry participants need while maintaining high standards of financial stability and investor protection. We believe this positions ADGM as a premier jurisdiction for responsible FRT issuance and shows our commitment to fostering responsible innovation in financial services.”

      As per the framework, an Accepted Fiat Referenced Token means a Fiat-Referenced Token that, in the opinion of the Regulator, meets the requirements that permit a regulated activity to be carried on in relation to it.
      The FSRA defined a Fiat-Referenced Token as a digital asset, the transfer and storage of which is achieved through the use of distributed ledger or similar technology, which can be used as a medium of exchange with a stable store of value, by referencing a fixed amount of a single fiat currency; and enabling the holder to redeem the token in exchange for the amount of the fiat currency referred to from its issuer upon demand.
      The fiat referenced token can be used for remittance payments, and payment transactions, including transfers, payments for services, direct debits, credit transfers between bank accounts, including standing order, and others.

      Central Bank of Bahrain studies how banks can offer stablecoins in the future

      Central Bank of Bahrain studies how banks can offer stablecoins in the future

      The Central Bank of Bahrain, while still piloting CBDCs, is moving forward with its stablecoin and crypto payments strategy and is currently studying the possibility of allowing local bank to offer stablecoins in next phase.

      The governor of the Central Bank of Bahrain (CBB), Khalid Humaidan in an interview with the Banker noted that the Central Bank of Bahrain is still in CBDC pilot phase utilizing different approaches for retail and wholesale CBDCs, yet at the same time strong interest is in stablecoins, and crypto payments according to  Yasmeen Alsharaf, director of the fintech and innovation unit at the CBB.

      Just as the governor of Bahrain Central Bank discussed piloting CBDCs both retail and wholesale, Yasmeen Al Sharaf in another interview discussed how the CBB recently issued a consultation on the regulation of stablecoins in October 2024 and is seeking in next phase to see how banks can offer stablecoins.

      CBDCs still in pilot or pre-pilot stages across GCC

      Back in June 2024, the IMF noted two thirds of countries in MENA were exploring CBDCs stating that Bahrain, Saudi Arabia and UAE were in more advanced proof of concept stages, it also noted that CBDCs required careful considerations. Today it seems that this is still the case.

      Humaidan speaking to the Banker explained, that the CBB is still piloting and trying different combinations and keeping their options open. He stated, “As the pilot progresses, we will refine our approach and decide what the right formula is for Bahrain.”

      He had commented that most central banks in the GCC (Gulf Cooperation Council) countries are in the same phase when it comes to CBDCs. They are either piloting or about to launch pilots. The reason is that there are still a lot of questions such as which is a priority retail or wholesale CBDCs, should a centralized or decentralized ledger be used?

      CBB is interested in stablecoins and crypto payments

      But while the Central Bank of Bahrain may still be piloting on the CBDC front, in terms of stablecoins and crypto payments, Yasmeen Alsharaf, Director of the Fintech and innovation unit at the CBB told Asian Banking & Finance at the Singapore Fintech Festival 2024 on 6-8 November, noted that stablecoins and crypto payments are areas of interest for the central bank.

      In October 2024, the CBB issued a consultation on the regulation of stablecoins.

      Alsharaf stated, “We will soon also be complementing that with the consultation to explore the opportunity to allow banks to also engage in offering Stablecoins. We are currently in the process of benchmarking other jurisdictions when it comes to crypto payments.”

      She added, “We believe that there’s a lot of opportunities when it comes to digital assets, a lot of use cases out there. And again, going back to what I mentioned earlier, a balanced regulatory framework is important to have in place to support those use cases whilst maintaining safe financial operations.”

      The statements come as Singapore Gulf Bank, a subsidiary of Whampoa Group, with a license in Bahrain, is in talks with a Middle East sovereign wealth fund to raise $50 million to acquire a stablecoin payments company in 2025 either in the Middle East or Europe. SGB is backed by Bahrain’s sovereign wealth fund Mumtalakat and privately held Singapore-based investment firm Whampoa Group.

      UAE has already published its stablecoin regulations

      While Bahrain it still in the consultation phase for its stablecoin regulation, the UAE Central Bank in June 2024 came out with the “UAE Stablecoin Payment Token Services Regulation” laying out the rules and conditions by the Central Bank of UAE for licenses pertaining to payment tokens, not allowing algorithmic tokens to be included and only allowing foreign stablecoins to be used to purchase virtual assets.

      The Central Bank of the UAE defined Payment Token Services as being digital payment services in the UAE comprising of three categories, namely Payment Token Issuance, Payment Token Conversion and Payment Token Custody and Transfer.

      Soon after Tether announced that it would be seeking to launch its AED stablecoin.

      The Chainalysis 2024 report which covered the MENA region showcased the growth of stablecoins, particularly in Turkey, Saudi Arabia and the UAE.

      Mbank launches first blockchain enabled national debit card in UAE

      Mbank launches first blockchain enabled national debit card in UAE

      In celebration of the UAE’s 53rd National Day, UAE based Mbank (Al Maryah Community Bank) , a digital bank, launched Jaywan Cards, the UAE’s first National Debit Card, on its blockchain enabled Mbank Wallet platform.

      As per the press release, the national debit card is powered by advanced blockchain technology. It empowers customers with the ability to pay seamlessly at all POS terminals across the UAE, transfer money internationally with ease, and enjoy zero fees for cash withdrawals. By leveraging the security and efficiency of blockchain, Mbank sets a new benchmark in financial convenience and inclusivity, reinforcing its commitment to innovation and serving the diverse needs of its customers.

      The press release added, that the launch of Jaywan Cards reflects Mbank’s commitment to fostering financial inclusion, serving the local community, and enhancing its position in the UAE’s financial ecosystem.

      This initiative aligns with the Central Bank of the UAE and Al Etihad Payments’ strategic timeline, supporting the introduction of over 10 million new debit cards into the UAE market over the next two years. Mbank extends its gratitude to Al Etihad Payments for their unwavering support and collaboration, which has been instrumental in bringing this transformative initiative to life and advancing the UAE’s payment infrastructure.

      The Mbank Wallet offers a full suite of payment solutions, giving users the ability to manage their finances on the app while using Jaywan Cards for in-person transactions.

      The Mbank Wallet is the UAE’s first national digital wallet built on decentralized blockchain technology, offering:

      • Payments Through All POS Terminals in the UAE: Jaywan Cards are widely accepted across the country for seamless transactions.
      • Instant Payments with QR Technology: Secure and quick payments for in-store and online purchases.
      • Cross-Border Transactions: International transfers facilitated through Lulu Exchange.
      • No Bank Account Needed: Customers can send, receive, and request payments using an IBAN, eliminating the need for a bank account.
      • Zero Fees for Cash Withdrawals: A fee-free experience at ATMs, ensuring greater financial accessibility.
      • Digital E-Vouchers: Simplify the process of purchasing gift vouchers from a wide range of top merchants

      “As we celebrate the UAE’s 53rd National Day, we take immense pride in introducing a transformative step forward with the launch of Jaywan Cards through the Mbank Wallet,” said Mr. Mohammed Wassim Khayata, CEO of Al Maryah Community Bank. “This groundbreaking initiative is a testament to our unwavering commitment to empowering the nation’s financial landscape, enhancing customer experiences, and driving the UAE’s vision of becoming a leader in financial inclusion and digital innovation.”

      He added, “With Jaywan Cards and the Mbank Wallet, we are not just redefining the banking experience but also reinforcing the UAE’s position as a hub for cutting-edge financial solutions. Our focus is on creating meaningful impacts that bring convenience and accessibility to every customer, reflecting the spirit of progress and innovation that defines our nation.”

      This announcement comes after AED Stablecoin LLC stated that the Central Bank of UAE provided it with in principle approval to launch and establish its own stablecoin, AE Coin.

      Bahrain based Singapore Gulf Bank to raise $50 million for stablecoin payment entity

      Bahrain based Singapore Gulf Bank to raise $50 million for stablecoin payment entity

      Singapore Gulf Bank, a subsidiary of Whampoa Group, with a license in Bahrain, is in talks with a Middle East sovereign wealth fund to raise $50 million to acquire a stablecoin payments company in 2025 either in the Middle East or Europe. The news was published in a Bloomberg article. SGB is backed by Bahrain’s sovereign wealth fund Mumtalakat and privately held Singapore-based investment firm Whampoa Group.

      The startup bank, will sell an equity stake of less than 10% by early 2025 according to the Bloomberg article.

      The proceeds will primarily go toward accelerating product development, enhancing the bank’s payment network and hiring more staff, the people said. The purchase of a stablecoin payments firm is planned for the first quarter in the Middle East or Europe, they said.

      Recently, Gulf Bank (SGB) appointed former Goldman Sachs executive Ali AlShamma as chief financial officer and ex-Sygnum executive Elaine Leong as chief operating officer. These two hires reinforce the mission of SGB to provide frictionless interaction between digital and traditional finance, said the digital bank.

      On launching in Bahrain Singapore Gulf Bank noted that it would provide a real-time settlement network, digital assets custody and intuitive trading solutions, all underpinned by robust AML/KYC measures. As per the announcement this would enable businesses to manage their finances flexibly, whether they are traditional or digital assets – facilitating their participation in the digital economy.

      Stablecoin usage has been growing in the Middle East and across the globe. Chainalysis in its recent MENA report noted that stablecoins and altcoins making gains across MENA particularly in Turkey, Saudi Arabia and the UAE. Turkey is number one in the world in stablecoin trading volume as a percentage of GDP, by a large margin. It’s important to note this measure is not saying that nearly 4% of Turkish GDP is stablecoins, but that stablecoin trading volumes on CEXs are equal to 4% of GDP in dollar equivalent terms, meaning crypto trading volumes could one day exceed a country’s measure of GDP.

      Stablecoins consistently represent the majority of crypto assets purchased with the Turkish Lira, approaching nearly $6 billion in purchases in March of this year. Stablecoin purchases with the Turkish Lira are closely correlated with inflation rates.

      Most recently the UAE Central Bank announced its stablecoin regulations as well.

      Yellow Card receives crypto asset provider license in South Africa

      Yellow Card receives crypto asset provider license in South Africa

      As stablecoin adoption surges in Africa, with sub Saharan Africa having the highest adoption rate in the world at 9.2%, Yellow Card, Africa’s leading stablecoin infrastructure provider has just been issued a crypto asset service provider in South Africa.

      Commenting on the FSCA’s decision to issue the license to Yellow Card Financial South Africa, Chris Maurice, Yellow Card’s co-founder and CEO, said, “The CASP license underscores Yellow Card’s commitment to its customers in South Africa and regulatory compliance across the continent. This achievement reflects our dedication to providing secure, compliant and transformative solutions for our customers both in South Africa and across Africa.  

      In South Africa alone, the number of total users of crypto assets is estimated to amount to 5.8 million people, and stablecoins have experienced growth of 50% month over month since October 2023, displacing bitcoin as the country’s most popular cryptocurrency.  Yellow Card is excited to play a pivotal role in this financial revolution in South Africa. 

      Yellow Card, which launched in South Africa in 2020, has facilitated over US$3 billion in transactions in the last several years and now operates in 20 countries across the continent. The company recently completed a US$33 million Series C financing, led by Blockchain Capital and existing investors, including Polychain Capital, Valar Ventures, Third Prime Ventures, Coinbase Ventures, and Block, Inc. (Square/Cash App), reflecting strong investor confidence in its mission.   

      With the recent licensing and funding, the company plans to expand its B2B offerings by enhancing its stablecoin rails, upgrading infrastructure, and advancing its B2B API and Widget. These efforts will empower businesses with seamless solutions for liquidity management and their general operations. 

      The UAE as well is also well on its way to growing stablecoin usage, after the Central Bank came out with the AED Stablecoin regulations, and regulations for global stablecoin usage.

      ADGM regulatory authority releases consultation paper for security tokens, stablecoins and more

      ADGM regulatory authority releases consultation paper for security tokens, stablecoins and more

      UAE ADGM regulatory authority, the Financial Services Regulatory Authority (FSRA) has published a consultation paper No.10 to propose amendments on various regulations including those related to virtual assets. The amendments discuss, Digital security tokens, commodity tokens, stablecoins, and utility tokens.

      As per the announcement, The proposed miscellaneous amendments result from the FSRA’s desire to simplify, clarify and correct certain requirements where appropriate and necessary, but are also in response to the FSRA’s experience of operating such legislation in practice.

      The consultation period will close on 10 December 2024.

      Digital Securities

      In terms of virtual assets under the title “Regulation of Digital security offerings, virtual assets under the FSMR (ICO Guidance) and its Guidance on Regulation of Digital Securities activity in ADGM, it deals with the FSRA’s treatment of virtual assets and the financial activities that can be conducted in relation to them within ADGM.

      The FSRA has defined Virtual Assets in the FSMR, as Digital Securities, which means digital or virtual tokens that have features and characteristics of a Security under the FSMR (such as Shares, Debentures and Units in a Collective Investment Fund).

      As such all financial services activities in relation to Digital Securities, such as operating primary / secondary markets, dealing / trading / managing investments in or advising on Digital Securities, are subject to the relevant regulatory requirements under the FSMR.

      Virtual assets as Commodities

      In addition, market intermediaries and market operators dealing or managing investments in Digital Securities need to be licensed / approved by FSRA as FSP holders (including as Multilateral Trading Facilities), Recognised Investment Exchanges or Recognised Clearing Houses, as applicable “Virtual Assets” such as non-fiat virtual currencies, crypto ‘exchange tokens.

      The Guidance also discusses virtual assets treated as commodities where only activities in Accepted Virtual Assets will be permitted.

      In terms of capital formation activities, they are not within the virtual asset framework offered by FSRA in ADGM. While Derivatives and Collective Investment Funds of Virtual Assets, Digital Securities and Utility Tokens regulated as Specified Investments under the FSMR will need to be licensed by FSRA as FSP holders.

      Utility Tokens

      When it comes to Utility Tokens, which means tokens that can be redeemed for access to a specific product or service and are not for investment, they are also not regulated.

      Stablecoins

      Fiat tokens or stablecoins, which are fully backed by underlying fiat currencies which are used as a payments instrument for the purposes of money transmission will be licensed and regulated by the FSRA as providing money services.

      ADFW Unveils Top Finance speakers including founder of Circle

      ADFW Unveils Top Finance speakers including founder of Circle

      Under the patronage of His Highness Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi, and Chairman of the Executive Council, Abu Dhabi Finance Week (ADFW), the flagship financial event of the MEASA region hosted by ADGM, has announced that its 2024 edition will gather more than 300 speakers from across the globe, including the CEOs and Chairs of 50 major global financial institutions.

      Among the confirmed speakers are finance titans such as Sergio Ermotti – Group CEO of UBS, Bill Huffman – CEO of Nuveen, David Hunt – President & CEO of PGIM, Isabelle Scemama – Global Head of AXA IM, Bill Ford – Chairman & CEO of General Atlantic, Shayne Nelson – Group CEO of Emirates NBD, Ray Dalio – Founder of Bridgewater,Rajiv Jain – Chairman and CIO of GQG Partners, Mohammed Alaradhi – Executive Chairman of Investcorp, His Excellency Ambassador Majid AlSuwaidi – CEO of Alterra, Jeremy Allaire –Co-Founder, Chairman and CEO of Circle and Mohamed Abdelbary – CEO of ADIB.

      His Excellency Ahmed Jasim Al Zaabi, Chairman of ADGM, said: “As Abu Dhabi continues to solidify its position as a global financial powerhouse, ADFW 2024 will be a pivotal moment for the financial industry. The rapidly increasing participation of CEOs from globally significant financial institutions underscores ADFW’s rising prominence and influence as a leading platform. At ADGM, we are committed to driving meaningful dialogue, fostering innovation, and reinforcing Abu Dhabi’s role as the Capital of Capital.”

      Local and regional government and government-affiliated leaders will also take centre stage at this year’s ADFW with prominent names such as Sheikha Shamma bint Sultan Bin Khalifa Al Nahyan – President & CEO of the UAE Independent Climate Change Accelerators (UICCA), H.R.H. Prince Khaled bin Alwaleed bin Talal Al Saud – Founder and CEO of KBW Ventures, H.E. Abdulla Bin Touq AlMarri – Minister of Economy of the UAE, H.E. Dr. Thani bin Ahmed Al Zeyoudi – Minister of State for Foreign Trade and Minister in charge of Talent Attraction and Retention at Ministry Of Economy of the UAE, H.E. Dr. Amna bint Abdullah Al Dahak – Minister of Climate Change & Environment of the UAE, H.E. Mohammed Ali Al Shorafa Al Hammadi –Chairman of the Department of Municipalities and Transport (DMT).

      Other speakers from world renowned organisations include Robert Salomon – Dean of Stern at NYUAD, Chi-Man Kwan – Group CEO and Founder of Raffles Family Office, Kim Fournais – CEO, Saxo Bank, Christian Angermeyer – Founder, Aperion Investments, Hatem Dowidar – Group CEO of E&, , Rishi Khosla – Co-Founder & CEO of Oaknorth, Javier Carranza – Global Head of Wealth of Grupo Santander, Shamsir Vayalil – Founder and Non-Executive Chairman & CEO of Burjeel Holdings and Andrew Sullivan – EVP & Head of International Businesses of Prudential.

      ADFW is currently registering interests and will be open for registration in the coming weeks. For more information please visit: www.adfw.com

      Central Bank of Qatar token regulations excludes crypto and stablecoins

      Central Bank of Qatar token regulations excludes crypto and stablecoins

      Qatar just announced its digital assets or token regulations. The Central Bank of Qatar, Qatar Financial Authority, as well as the QFC regulatory authority released the regulations that would allow for tokenization of real world assets not including cryptocurrencies or stablecoins. This comes after Qatar had announced its DLT regulations, as well as launched its Digital Assets Lab. Throughout this time Qatar had always made it clear especially through QFC that this pertained to tokenization of real world assets for financial and investment purposes.

      On Sunday October 29th, Qatar announced one of the biggest digital assets initiatives in the country and the GCC region, the Qatar Innovation Dome for digital assets. The digital asset lab was aimed to develop tokenization platforms and ecosystems for everything that has value whether tangible assets or intangible assets including real estate assets, securities, Sukuk, bonds and others in the future utilizing DLT ( distributed ledger technologies), blockchain, and smart contracts.

      Today the digital asset token regulations has provided the framework to implement this.

      The regulations cover all activities related to permitted tokens

      As per the framework the regulations apply to tokens meeting the criteria specified which are under permitted tokens. It also covers transactions involving permitted tokens, and the provisioning of these token services. It also covers token custodians, and token exchanges, token transfer providers, token validators as well as token issuers which they call token generators.

      Token custody services means the service of holding or controlling tokens on behalf of clients; or holding or controlling the means by which clients’ tokens may be recorded and transacted on token infrastructure. A company that holds or safeguards the private keys for its clients’ tokens is providing custody services in relation to those tokens. An entity licensed to provide token custody services may be referred to as a token custodian.
      Qatar regulations also discussed Operating a token exchange which means operating a system which brings together multiple third party buying and selling interests in tokens, in accordance with the system’s non-discretionary rules, in a way that results in a contract in respect of the tokens. As per the regulation a token exchange which operates a facility which is merely an order routing system where buying and selling interests in, or orders for, tokens are merely transmitted but do not interact is not operating a token exchange.

      Token is defined as digital representation of real property or rights

      As per the regulation a token means a unique electronic data unit that is cryptographically secured. It is a digital representation of real or personal property rights including contractual rights and is capable of being issued, transferred or stored using DLT ( Distributed Ledger technology) or other similar technology.

      DLT or blockchain technology will be used to transfer and store the permitted token.

      Crypto and stablecoins not included in Digital asset regulation

      The new digital asset regulations however are very clear on what they considered as not permitted tokens. In short, non permitted tokens are tokens that do not represent a right in a property. As such cryptocurrencies, and stablecoins are considered not permitted or excluded tokens from this regulation.

      As noted in the regulation “ Excluded tokens include a currency that can otherwise be used as a means of payment. Examples: A cryptocurrency token that is used as an alternative to fiat currencies but is not issued or backed by any governmental authority and does not represent any ‘off-chain’ property, is an example of an excluded token.”

      It goes on to add, “ A token commonly referred to as a stablecoin, is an example of an excluded token. This is because a stablecoin is regarded as a substitute for currency that can be used as a means of payment.”

      Accepted tokens include for example a token representing a right to a commodity, such as a precious metal.

      Investment tokens included in regulation

      The regulation also allows investment tokens under what it calls tokenized schemes or token investing schemes or tokenized funds.
      As per the regulations, “ A QFC scheme, or a sub scheme of a QFC umbrella scheme, is a tokenized scheme if any of the units in the scheme or sub scheme are investment tokens. A QFC scheme, or a sub scheme of a QFC umbrella scheme, is a token investing scheme if the scheme’s, or sub scheme’s, constitutional document states that it is an object of the scheme to invest in tokens.”
      The regulation notes that tokenized investment schemes could cover Islamic funds, money market funds, feeder funds or property fund schemes.
      In addition the regulation discusses tokenized investment funds and notes that, “ a professional investor fund is a tokenized fund if any of the units in the fund are investment tokens; a token investing fund if the fund’s constitutional document states that it is an object of the fund to invest in tokens.

       H.E. Sheikh Bandar bin Mohammed bin Saoud Al Thani, Qatar Central Bank Governor, stated, “Launching the 2024 Digital Assets Regulations marks a significant milestone in our journey towards realizing the Third Financial Sector Strategy.” He noted that this framework will create significant opportunities and support establishing a robust regulatory environment within the financial sector. This will support Qatar’s digital transformation goals, in line with the Third National Development Strategy, the final phase of the Qatar National Vision 2030.

      Yousuf Mohamed Al-Jaida, Chief Executive Officer, QFC, added “The introduction of the Digital Assets Framework 2024 underscores our commitment to creating a robust regulatory regime aligned with international best practices. We are proud to set a blueprint for developing, applying, and operating digital assets, that promotes market trust and confidence. We anticipate that this regulatory clarity will attract both domestic and international players, boosting Qatar’s financial services sector competitiveness.”

      UAE XRP oil sale deal is false and illegal in UAE

      UAE XRP oil sale deal is false and illegal in UAE

      The recent story that the UAE and India carried out an oil deal using XRP token over CFT (Crypto trading Fund) ledger, is not only unbacked and false but also illegal in the UAE.

      The story which was first published in a media entity called Cryptoalert soon was copied and published as if it was real news.

      The cryptoalert piece stated that “In a historic shift, India and the United Arab Emirates (UAE) have completed their first-ever crude oil transaction using their local currencies, effectively bypassing the US dollar. This landmark trade signals a broader strategy, set in motion last July, aimed at promoting trade in native currencies and cutting down on dollar-conversion costs.”

      It also stated that the trade was integrated with the XRP Ledger System CryptoTradingFund (CTF), allowing customers to earn cash back rewards in CTF tokens.

      The piece did not mention which entities had transacted this crude oil transaction, nor where there any social media posts, press releases or confirmations from either CTF or Ripple on the topic. Yet this did not stop many media entities in the crypto and blockchain ecosystem from publishing the story.

      Since then prominent blockchain pundits have noted how media publish false stories to push crypto users to purchase XRP and CFT token.

      Ripple is not XRP

      “XRP” and “Ripple” are often erroneously used interchangeably. Ripple (previously Ripple Labs) is a company, and XRP is the name of the native cryptocurrency for XRP Ledger, an open-source distributed ledger run by the XRPL foundation.

      As such proponents of XRP are distributed across many entities and individuals and not only Ripple which uses XRP ledger in some of its products.

      UAE Dirham backed stablecoin

      In addition, the UAE Central Bank recently announced its payment token regulation which stipulates that stablecoins, and crypto cannot be considered as legal tender in the UAE. The only stablecoin that the UAE will allow for payments inside the UAE are digital dirham stablecoins.

      To date no digital dirham stablecoin has been issued within the UAE. As such it would be not only impossible but also illegal for oil to be sold to another country using a digital asset, crypto other than the dirham stablecoin which is pegged to the UAE Dirham.

      XRP recognized in DIFC

      The only recognition for XRP in the UAE is within DIFC ( Dubai International Financial Center). In November 2023, two new crypto tokens TonCoin (TON), and XRP joined Bitcoin (BTC), Ethereum, and Litecoin as recognized crypto tokens by the Dubai Financial Services Authority (DFSA), the financial regulatory agency of the special economic zone, the Dubai International Financial Centre (DIFC). The announcement of XRP being accepted into DIFC as a crypto token was published in a Ripple press release.

      The DFSA the crypto token regime now includes five crypto tokens that can be utilized by virtual asset firms within the DIFC. Licensed firms will be able to incorporate XRP and TON into their virtual asset services. XRP and TON will be available for use by institutions located in the DIFC to accelerate faster, more efficient global value exchange.

      As such the only legal utility for XRP would be in a free zone DIFC to be specific.

      Tether invests $3 million in Kuwait’s Kem fintech startup

      Tether invests $3 million in Kuwait’s Kem fintech startup

      Tether Operations Limited, a company in the digital assets domain, and creator of USDT stablecoin has announced a $3 million strategic investment in Kuwait based Kem app, a platform designed for money transfers and financial management.

      As per the press release, the investment and collaboration will allow Kem App to introduce USDT on its platform to drive widespread adoption in the MENA region to revolutionize traditional payment systems.

      The Middle East and North Africa (MENA) has the sixth largest crypto economy of any region, with an estimated $389.8 billion in on-chain value received between July 2022 and June 2023. This represents nearly 7.2% of global transaction volume during this period.

      The announcement notes that with the launch of USDT on Kem app, millions of expats in countries such as Kuwait, Bahrain, Saudi Arabia, Qatar and Iraq will benefit from using USDT and accessible financial services.

      The Kem app, enbles seamless cross-border transactions. Tether’s investment underscores its commitment to expanding accessibility and fostering global financial inclusion. This initiative also signifies a strategic expansion into the Middle East market, with Kem serving as a regional asset.

      Paolo Ardoino, CEO of Tether, said, “This investment reinforces Tether’s commitment to promoting financial inclusion and stability. We believe that everyone should have the means to protect their families and businesses against inflation while enjoying unrestricted access to financial services. Our investment in Kem App is a testament to this belief, as the platform provides tools that simplify access to the financial system, perfectly aligning with our mission to advance financial freedom for all.”

      Stablecoin Growth in MENA

      In June 2024, the UAE Central Bank approved the issuance of a regulation for licensing and overseeing stablecoins and a series of policies aimed at supporting the banking, insurance, and financial services sectors. UAE Stablecoin Payment Token services regulation came out laying down the rules and conditions by the Central Bank of UAE for licenses pertaining to payment tokens, not allowing algorithmic tokens to be included and only allowing foreign stablecoins to be used to purchase virtual assets.

      The UAE Central Bank made a clear distinction between the Dirham Payment token which can be issued by licensed payment token issuers used for any lawful purpose, and the foreign payment token issued by a Registered Foreign Payment Token Issuer which can only be used as a means of payment for purchasing virtual assets or derivatives of virtual assets.  

      As reported by CoinMarketCap, the total market capitalization of stablecoins reached $174 billion as of August 2024 – with USDT (Tether), USDC (Circle), and DAI, together accounting for circa 93 percent of the market.

      Tether is not the only stablecoin issuer that is trying to enhance its presence in the MENA region. In December 2023, Circle Internet Financial (Circle), and UAE based Fuze, MENA’s digital assets infrastructure provider, to expand adoption of USDC stablecoin in MENA region, after signing MOU (Memorandum of Understanding).

      Circle, the issuer of the US-dollar backed stablecoin USDC, will work with Fuze to expand the adoption of USDC amongst new customers in the region, such as banks, fintechs, traditional enterprises and Web3 firms. The scope of the agreement covers the Middle East, Africa and Turkey, paving the way for the expanded use of USDC in these regions and the piloting of new use cases relevant to these markets.

      Tether’s investment and collaboration is also setting the stage for Kem to enhance its offerings and better serve millions of underserved businesses throughout the Middle East. By incorporating cryptocurrencies into its platform, Kem aims to replicate the success of financial platforms offering cryptocurrencies in other markets, driving mass adoption and fostering a more inclusive banking landscape in the Gulf region.