Crypto regulation in the world: weekly digest #145
The UAE
FAB (First Abu Dhabi Bank), IHC (International Holding Company), and the Abu Dhabi sovereign wealth fund ADQ are collaborating to launch a new stablecoin pegged to the UAE dirham, fully regulated by the Central Bank of the UAE. This stablecoin, to be issued by FAB pending regulatory approval, will operate on the ADI blockchain developed by the ADI Foundation, a UAE-based nonprofit focused on compliant blockchain infrastructure.
The stablecoin aims to serve as a reliable digital currency for a wide range of daily transactions by individuals, businesses, and institutions both domestically and internationally. It is designed to facilitate payments, including emerging use cases such as AI-driven machine-to-machine payments. The project reflects the UAE’s ambition to strengthen its digital economy, boost blockchain innovation, and position itself as a global hub for digital assets.
The stablecoin will enhance the UAE’s digital payments ecosystem by providing a secure, efficient, and scalable blockchain-based payment solution, supporting the country’s vision of a connected digital economy. It will simplify and speed up payments for citizens, businesses, and institutions both domestically and internationally, improving ease of doing business and cross-border trade. By enabling low-cost, instantaneous digital transactions, the stablecoin supports financial inclusion, particularly benefiting migrant workers, small businesses, and those in economies with unstable currencies.
In summary, the stablecoin is expected to revolutionize payments, enhance financial inclusion, reduce costs, and strengthen the UAE’s position as a leading digital economy and fintech innovation hub. This initiative follows the UAE’s earlier launch of AE Coin, another dirham-backed stablecoin, underscoring the country’s rapid embrace of digital currencies and blockchain technology.
The UK
The UK Treasury published a draft bill proposing a comprehensive new regulatory regime for cryptoassets under the Financial Services and Markets Act 2000 (FSMA). This draft legislation aims to bring crypto exchanges, dealers, agents, and stablecoin issuers within the UK’s financial regulatory perimeter, aligning crypto regulation more closely with traditional financial services.
The bill creates regulated activities specific to crypto, such as operating a cryptoasset trading platform, dealing in qualifying cryptoassets, custody arrangements, arranging transactions, and issuing qualifying stablecoins. Firms engaging in these activities will require authorization from the Financial Conduct Authority (FCA).
It introduces clear definitions of «qualifying cryptoassets» and «qualifying stablecoins» as the principal classes of cryptoassets covered. Qualifying stablecoins are fiat-referenced tokens aiming to maintain a stable value relative to a fiat currency.
While stablecoin issuance by UK entities will be regulated, the government has decided not to bring stablecoins into the UK payments regulation framework at this stage. Stablecoins remain unregulated as payment instruments for now, though the government is open to future reforms as adoption grows.
The regime applies to crypto firms serving UK customers, imposing standards on transparency, consumer protection, and operational resilience akin to those in traditional finance. Truly decentralized finance (DeFi) protocols without a controlling party are excluded from authorization requirements. Existing crypto firms will have a transitional period to apply for FCA authorization or wind down operations if they fail to comply.
The draft statutory instrument is open for technical comments until May 23, 2025. Subject to parliamentary approval, the government intends to enact the legislation by the end of 2025. The FCA and Prudential Regulation Authority (PRA) will be empowered to issue rules and guidance to implement the new regime.
This draft bill marks a significant step in formalizing crypto regulation in the UK, balancing consumer protection with fostering innovation, and aligning with international regulatory trends, especially those in the US.
The EU
The European Union will institute new Anti-Money Laundering (AML) rules for crypto, which include banning anonymous crypto accounts and privacy coins by July 1, 2027.
These rules are part of a broader AML framework that encompasses bank and payment accounts, passbooks, and safe-deposit boxes. The new rules will require exchanges, banks, and other service providers to refrain from servicing anonymous accounts or dealing with assets that conceal user data.
The new rules fall under the Anti-Money Laundering Regulation. Article 79 of which establishes strict prohibitions on anonymous accounts. Credit institutions, financial institutions, and crypto asset service providers (CASPs) will be prohibited from maintaining anonymous accounts or handling privacy-preserving cryptocurrencies, such as Monero (XMR) and Zcash (ZEC).
Crypto platforms that operate in six or more EU countries will be directly supervised by the Anti-Money Laundering Authority (AMLA). AMLA will select 40 companies, with at least one from each member state, by 2027. AMLA will employ thresholds to ensure that only firms with a significant operational presence in multiple jurisdictions are considered for direct supervision. These include a minimum of 20,000 customers residing in the host member state or a total transaction volume exceeding 50 million euros.
Mandatory customer due diligence will be required for transactions above 1,000 euros.
News from other countries:
Arizona Governor Katie Hobbs vetoed Senate Bill 1025, a proposal that would have allowed the state to invest seized funds into Bitcoin and create a state-managed digital assets reserve. The bill had passed the Arizona House with a close vote of 31–25 but was rejected by the governor, who cited concerns about the risks of investing public funds in what she called an «untested investment» like cryptocurrency. Hobbs emphasized that the Arizona State Retirement System is one of the strongest in the nation due to its sound investment strategy and stated that it is not the place to experiment with virtual currencies.
We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!
