The Financial Services Regulatory Authority (FSRA) has announced a new regulatory framework for the issuance of Fiat-Referenced Tokens (FRTs) within the Abu Dhabi Global Market (ADGM). This framework formalises guidelines following feedback on Consultation Paper No. 7 of 2024 and aims to expand the scope of regulated digital assets in the jurisdiction.
The framework outlines key standards for FRT issuers, including:
- Reserve assets: Strict requirements to minimise variability in FRT values.
- Governance and integrity: Obligations for independent attestation and stress testing.
- Transparent disclosure: Requirements for detailed whitepapers and ongoing risk and operational disclosures.
- Prudential safeguards: Capital adequacy requirements and business restrictions.
- Redemption rights: Ensuring FRT holders can redeem at par value within set timeframes.
FRT issuance is now classified as a distinct regulated activity under ADGM’s financial services regulatory regime. The framework aligns with international standards and introduces risk-proportionate measures to ensure safety and compliance for issuers.
Emmanuel Givanakis, CEO of the FSRA, stated, “Our FRT framework is a significant milestone in ADGM’s evolution as an international financial center. Through extensive consultation with industry stakeholders, we have created a regime that balances innovation with strong regulatory oversight. This framework provides regulatory certainty while maintaining high standards of financial stability and investor protection.”
The framework is designed to support responsible innovation and positions ADGM as a key jurisdiction for FRT issuance.
