Crypto regulation in the world: weekly digest #126

UAE

The Abu Dhabi Global Market (ADGM) has recognized USDT as an Accepted Virtual Asset, allowing regulated enterprises within its jurisdiction to provide stablecoin-related services. This approval enables licensed firms to offer USDT services in the region, marking a significant milestone for Tether's expansion in the Middle East.

While USDT is not legal tender, this recognition enhances its status and usability within Abu Dhabi's financial ecosystem. The move aligns with the UAE's broader strategy to position itself as a cryptocurrency hub, attracting major global companies and fostering innovation in the digital asset space.

It's important to note that cryptocurrencies like Bitcoin, Ethereum, and Tether are considered legal to trade in the UAE, but they are not classified as legal tender. The UAE's approach focuses on regulating and integrating cryptocurrencies into its financial system rather than declaring them as official currency.

This development is part of a larger trend in the UAE towards embracing blockchain technology and digital currencies. The country has been making significant progress in establishing a regulatory framework for cryptocurrencies, including the recent approval of a dirham-pegged stablecoin by the UAE Central Bank.

Also, this decision is a consequence of the recent introduction of a comprehensive regulatory framework for Fiat-Referenced Tokens (FRTs) in Abu Dhabi.

USA

Ripple's RLUSD stablecoin has received final approval from the New York State Department of Financial Services (NYDFS). This regulatory milestone allows Ripple to launch RLUSD in the United States, marking a significant development for the company's expansion into the stablecoin market. RLUSD is designed as a 1:1 US dollar-backed stablecoin, supported by US dollar deposits, short-term US government treasuries, and other cash equivalents. The stablecoin aims to facilitate cross-border payments, enhance liquidity in digital asset markets, and serve as a bridge between fiat currencies and crypto assets.

RLUSD will soon be available on cryptocurrency exchanges and partner platforms. The stablecoin primarily targets large institutional players and will operate within a strict regulatory framework, ensuring user protection and market integrity.

Ripple CEO Brad Garlinghouse expressed enthusiasm for the approval, stating that RLUSD trading will be available soon on various platforms. This development is expected to expand Ripple's reach and offer more efficient blockchain-based financial solutions.

RLUSD will initially be supported on two blockchains:

• XRP Ledger (XRPL): Ripple's native blockchain;

• Ethereum: As an ERC-20 token.

Ripple has plans to expand RLUSD to additional blockchains and decentralized finance (DeFi) protocols in the future, aiming to increase its compatibility and usability across various platforms.

Ukraine

Ukraine is preparing to legalize cryptocurrency by early 2025, with a draft law expected to be ready for its first reading after the New Year. The legislation is being developed in collaboration with the National Bank of Ukraine and the International Monetary Fund, aiming to create a comprehensive regulatory framework for digital assets and aligning it with the EU's Markets in Crypto-Assets (MiCA) regulation.

Key aspects of the planned legal framework include:

• Regulation of cryptocurrency transactions similar to securities;

• Taxation of profits from digital assets when converted to fiat currencies;

• No tax exemptions for cryptocurrencies to prevent potential misuse;

• Alignment with international standards, including FATF compliance.

The proposed law is based on the «On Virtual Assets» law that came into force in March 2022 and set the initial groundwork for regulating the digital asset market in Ukraine. However, full implementation has been delayed pending amendments to the country's Tax Code.

Ukraine's approach to cryptocurrency regulation is cautious and measured, taking into account input from European experts and the IMF. This strategy aims to create a stable and transparent market while encouraging innovation and attracting investment from digital asset companies.

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