Crypto company Circle, the issuer of the USDC stablecoin, announced that the financial regulatory body of Abu Dhabi has approved the company with an In-Principle Approval (IPA), a step toward obtaining a full financial services license.
The regulatory body in Abu Dhabi is called the Financial Services Regulatory Authority (FSRA). Circle now has the opportunity to seek a full Financial Services Permission (FSP) license, which would allow it to operate as a regulated money services provider in the United Arab Emirates (UAE). Circle announced the move as part of its key strategy to establish deep roots in traditional markets and fully embrace a crypto-powered global economy. Circle aims to develop a trustworthy, stablecoin that is transparent and fully compliant.
The UAE has embraced blockchain technology through its regulatory oversight of Circle. The announcement shows that the UAE is committed to creating a blockchain economy in the Middle East, because such regulatory approval indicates an acceptance of cryptocurrency as a legitimate form of money. Circle sees this move as a positive sign for the UAE, stating that the country is embracing innovative new technologies.
Jeremy Allaire, CEO of Circle, said that the regulatory approval has opened up new investment pathways in the United Arab Emirates. This is not the first time Circle has conducted business in the UAE. Circle has previously announced a collaboration with Hub71, an innovation ecosystem in Abu Dhabi that features a regulatory sandbox, access to institutional networks, and opportunities for startup funding.
The First Abu Dhabi Bank (FAB) released its stablecoin just days ago, approved by the UAE Central Bank. FAB plans to utilise the stablecoin for both local and global use, allowing for fast payments worldwide and access to financial markets with minimal interference. Circle was not the first stablecoin issuer to apply for approval. Tether was the first stablecoin issuer to seek approval in the United Arab Emirates. The fact that the UAE is allowing multiple stablecoins to compete in the country is a positive sign that the government is aiming for a healthy ecosystem of blockchain innovation. There is also an ongoing battle among stablecoins to establish dominance in the market. Many of the companies behind stablecoin tokens are aware of the growing popularity of the technology and are trying to establish themselves quickly before competing tokens take over the market.
The UAE, meanwhile, has been trying to develop itself as a global hub for Web3 technology and financial innovations. They have been accomplishing this by making strategic partnerships with key companies in the industry. The UAE ranked third in terms of crypto adoption, according to an index by Henley and Partners. There seems to be enough interest in the country to support a booming crypto market. The UAE further embraced real estate tokenization, with various collaborations and a novel approach that included real estate businesses with the nation’s top crypto regulator.