Circle, the issuer of the USDC stablecoin, has received in-principle approval (IPA) from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) to operate as a money services provider in the UAE, announced on April 29, 2025. This is not a full license but a significant step toward obtaining a Financial Services Permission (FSP), allowing Circle to offer regulated financial services in the region. The approval follows Circle’s incorporation of a legal entity in ADGM in December 2024, aiming to expand its presence in the Middle East and Africa.
USDC, with a circulating supply of $62 billion (up 40% in 2025), is the second-largest stablecoin, backed by US dollar reserves. Circle’s CEO, Jeremy Allaire, stated that the approval aligns with the UAE’s push for innovation in digital finance and strengthens Circle’s commitment to global stablecoin oversight, trust, and compliance. Circle also partnered with Hub71, Abu Dhabi’s tech ecosystem, to foster fintech innovation through ADGM’s digital regulatory sandbox, providing startups with resources and mentorship.
This move builds on Circle’s global expansion, including compliance with the EU’s MiCA regulations in 2024 and USDC trading approval in Japan in March 2025. The UAE’s crypto-friendly regulations and projected $254.3 million crypto market by 2025 make it a strategic hub for Circle’s operations. The in-principle approval (IPA) for Circle to operate as a money services provider in Abu Dhabi Global Market (ADGM) carries several implications for Circle, the UAE, and the broader stablecoin and fintech ecosystem.
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The approval positions Circle to tap into the UAE’s growing crypto market, projected to reach $254.3 million by 2025, and expand USDC adoption in the Middle East and Africa. This strengthens USDC’s global footprint as the second-largest stablecoin. Establishing a legal entity in ADGM makes Abu Dhabi a strategic base for Circle’s operations, potentially attracting more institutional and retail users in a crypto-friendly jurisdiction.
Regulatory Legitimacy and Trust
Circle’s alignment with ADGM’s stringent regulations enhances its reputation as a compliant stablecoin issuer, especially after navigating the EU’s MiCA framework and Japan’s approvals. This could set a precedent for stablecoin oversight in the region. Regulated status in a reputable financial hub like ADGM may boost confidence among investors and partners, reinforcing USDC’s stability and reliability compared to competitors.
Circle’s partnership with Hub71 and participation in ADGM’s digital regulatory sandbox will drive fintech innovation, supporting startups and fostering blockchain-based financial solutions in the UAE. The UAE’s crypto-friendly policies, combined with Circle’s presence, could attract more blockchain firms, contributing to economic diversification and positioning Abu Dhabi as a global digital finance hub.
Circle’s regulatory milestones in the UAE, EU, and Japan give it a competitive advantage over other stablecoin issuers like Tether (USDT), especially in regions prioritizing compliance. USDC’s regulated presence in the UAE could accelerate its use in cross-border transactions and remittances, leveraging the UAE’s role as a global trade hub. While the IPA is a step forward, obtaining the full Financial Services Permission (FSP) requires ongoing compliance with ADGM’s rigorous standards, which could delay or complicate operations.
The crypto market’s volatility and potential regulatory shifts in other jurisdictions could impact USDC’s growth trajectory in the region. Circle’s regulated operations could encourage traditional financial institutions in the UAE to integrate USDC for payments, settlements, or DeFi applications, bridging traditional and decentralized finance.
The UAE’s progressive stance may inspire other Middle Eastern countries to adopt similar crypto-friendly frameworks, expanding the regional market for stablecoins. Circle’s IPA in Abu Dhabi enhances USDC’s global reach, strengthens the UAE’s position as a fintech leader, and intensifies stablecoin competition, while navigating regulatory and market challenges.
