According to PANews, the Abu Dhabi Financial Services Regulatory Authority (FSRA) is set to regulate fiat-referenced tokens (FRTs), a type of stablecoin, in response to stakeholder demands for their issuance. The FSRA has invited public feedback on the proposed regulatory framework. The Abu Dhabi Global Market (ADGM) financial regulator stated that FRT issuers would be subject to operational restrictions and requirements. The FSRA recommends that the market value of reserve assets should at least equal the face value of all circulating FRTs at the end of each business day. Additionally, FRTs should be valued at daily market prices. The regulator also suggests that institutions issuing multiple FRTs should maintain separate reserve asset pools for each FRT and manage each pool independently.

The FSRA has set October 3, 2024, as the deadline for submitting feedback on the proposal. After receiving feedback, the FSRA will consider whether modifications to the proposed regulatory framework for FRTs are necessary. Subsequently, the ADGM board and FSRA will work on finalizing the regulatory framework. Considering definitions from other jurisdictions, the Abu Dhabi Financial Services Regulatory Authority proposes defining FRTs as digital assets whose transfer and storage are electronically facilitated using distributed ledger technology. The value of FRTs should be pegged to a fixed amount of a single fiat currency, allowing holders to redeem FRTs from issuers for an equivalent amount of fiat currency when needed. In addition to implementing a regulatory framework for FRT issuance, the FSRA is also reviewing a range of existing regulated activities to consider any relevant amendments for activities that might use FRTs. This proposal will be presented in a separate consultation document, which will consider the acceptance of tokens for services or investments and the use of token holding or transfer for providing payment services.