Binance, Circle and Tether Part of Abu Dhabi Licensing Wave

If you're reading this and still haven't signed up, click the subscribe button below!

Pssst. We also have a podcast… find that here on your favourite podcast player or here on YouTube 🙏 

Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast Simon Taylor of Fintech Brainfood, Pet Berisha of Sporting Crypto, and Shwetabh Sameer of Molten Ventures.

We are the newsletter for institutions that need help preparing for a Tokenized future.

We run through the headlines every week, what it means for you and a market readout. Always with an institutional, business-focused perspective. 

Join us every week as we meet your Tokenization needs.

Simon’s Market Readout 💬 

I've been in Abu Dhabi all week for Abu Dhabi Finance Week. And in that same week, both Binance and Circle secured major regulatory authorizations from ADGM, the Abu Dhabi Global Market. They've launched local hubs, they're hiring regionally, and the intent is unmistakable: Abu Dhabi is positioning itself as the place where East meets West in the future of trade.

And they see stablecoins as a major piece of that.

As a major oil exporter and a strategic partner to both hemispheres, the UAE is uniquely positioned to make that happen. ADGM is intentionally building one of the most thoughtful regulatory environments for digital assets - and it shows. The major players are here in force.

But here's what makes this different from the traditional "offshore" model: this is high caliber. This is not purely permissive. There is major capital flowing, major money moving, and real infrastructure being built to global standards.

You can see quite easily how the stablecoin dollar is becoming the new petrodollar. And it shouldn't surprise us that the major petro states are the ones paying closest attention. What emerges to manage it, protect it, and control it is still work in progress at the global level.

But the strategic calculus has shifted. With the GENIUS Act now behind us and MiCA implemented in Europe, the landscape is clearer - and also more difficult. Europe is a complicated place to operate. The UK is moving slower than expected. And ADGM sees its opportunity in that gap.

This has been a fascinating week. Expect to look East a lot more for regulatory innovation over the next 6 to 12 months.

Stories You Can't Miss 📰

🏛️ UAE Assembles Complete Regulated Crypto Stack in 48 Hours

Within two days during Abu Dhabi Finance Week, ADGM handed out approvals to three of the industry's largest players: Binance, Circle and Tether. But here's what’s been overlooked - these aren't the same license. ADGM just built out a complete regulated crypto stack, layer by layer. (Simon was on the ground in Abu Dhabi all week. See his Market Readout for the bigger picture on why the Gulf is positioning itself at the center of stablecoin infrastructure.)

Key Points:

• Binance received the most comprehensive authorization: a full exchange, clearing house and broker-dealer framework through three regulated entities operating under the "Nest" brand. Operations begin January 5, 2026. For an exchange that spent years navigating enforcement actions and partial licenses across so many jurisdictions, this represents a huge shift - the first time Binance.com will operate under a complete supervisory regime covering every layer of exchange activity.

• Circle secured a Financial Services Permission (FSP) license to operate as a Money Services Provider, enabling regulated USDC payment and settlement services plus developer infrastructure expansion across the UAE. The company appointed Dr. Saeeda Jaffar (formerly Visa's Senior Vice President for the Gulf Cooperation Council) as Managing Director for Middle East & Africa to lead regional expansion.

• Tether received token recognition rather than an operating license. USDT is now an "Accepted Fiat-Referenced Token" for use by licensed ADGM institutions across 12 blockchains including Ethereum, Solana, Avalanche, Aptos, TON, TRON, Polkadot, and Cosmos. This positions ADGM-licensed entities to serve emerging market corridors that Western-focused competitors often overlook.

• ADGM’s stablecoin register now includes the market's major players: USDC, USDT, Ripple’s RLUSD, and World Liberty Fi’s USD1. In parallel, IHC, ADQ and First Abu Dhabi Bank are developing a CBUAE-regulated, dirham-backed stablecoin on the ADI blockchain

• Combined scale: Together, Circle and Tether represent $260+ billion in stablecoin market cap. Add Binance's exchange volume, and you have the majority of global crypto infrastructure now operating under unified regulatory oversight in a single jurisdiction.

The Tokenized Take:

The UAE just assembled a full-stack regulated crypto ecosystem in one week. And positioned Abu Dhabi as the place where East meets West in the future of digital trade. Exchange infrastructure (Binance), stablecoin issuance and operations (Circle) and token recognition for institutional use (Tether) - all licensed under one jurisdiction within 48 hours. That's not coincidence. That's strategy.

This contrasts with other major jurisdictions. Europe delisted Tether under MiCA - USDT was removed from Binance EU, Kraken, etc. by Q1 2025 due to non-compliance. Binance withdrew license applications from Germany, the Netherlands, and Cyprus amid regulatory pressure and remains absent from the MiCA-approved list. The US has the GENIUS Act, but implementation will take time. And while Binance resolved its DOJ and SEC cases, it still lacks a comprehensive US regulatory home. Meanwhile, Abu Dhabi just licensed all three under a single framework and told them to start operating.

Institutional implications matter. This isn't the traditional offshore model - ADGM is dominated by banks and sovereign wealth funds, not retail traders, and the licensing standards reflect that caliber. As these institutions explore stablecoins for treasury operations and cross-border settlement, having Binance, Circle and Tether all operating under local regulatory oversight removes the "jurisdictional ambiguity" objection that compliance teams have used to delay adoption.

Circle's hire signals where they see the opportunity. Dr. Jaffar spent years building Visa's corporate and government payment relationships across the GCC. You don't bring in that profile to chase retail crypto trading. You bring it to win enterprise treasury accounts and government payment infrastructure contracts.

For Tether, the multi-chain token recognition is the quiet blockbuster. ADGM didn't just approve USDT on Ethereum. They approved it across a dozen networks, including TON and TRON - chains that dominate emerging market stablecoin flows but rarely appear in institutional conversations. Institutional capital that previously avoided Tether due to regulatory ambiguity can now custody and transact USDT through licensed entities in Abu Dhabi.

The broader question: is this the beginning of sustained regulatory arbitrage? It's hard to ignore the symbolism - a major petro state positioning the stablecoin dollar as the next evolution of trade settlement infrastructure. For institutions seeking regulated stablecoin access now, Abu Dhabi just became the path of least resistance. Whether that translates into durable competitive advantage, OR simply creates a staging ground until larger jurisdictions finalize their frameworks, depends entirely on how quickly the US and EU close the gap.

🚀 Tempo Launches Public Testnet with Mastercard, UBS and 14 Design Partners

Disclosure: Simon Taylor, a Tokenized Newsletter editor, leads GTM at Tempo. The analysis below represents the views of Tokenized's other editorial contributors and does not reflect Simon's perspective or involvement.

The Stripe and Paradigm-backed blockchain Tempo launched its public testnet this week. Since announcing in September, the project has expanded from its initial design partners (Deutsche Bank, Visa, Shopify, OpenAI, Nubank) to now include 14 institutional partners and 40+ infrastructure providers.

Key Points:

• New design partners announced: Brex, Coastal, Cross River, Deel, Faire, Figure, Gusto, Kalshi, Klarna, Mastercard, Payoneer, Persona, Ramp and UBS

• Technical specs now live: ~0.5-0.6 second deterministic finality, stablecoin-native gas fees, dedicated payment lanes (guaranteed blockspace), native memos for invoice numbers and cost centers, and passkey authentication (Face ID/fingerprint)

• Open source: Client released under Apache license. So anyone can run a node

• Active testing underway: Partners already building remittances, global payouts, embedded finance, tokenized deposits and agentic commerce applications

• Circle's Arc also in testnet: Launched October 28 with 100+ design participants including Invesco, JPYC and stablecoin issuers from seven countries

The Tokenized Take:

Read the partner list again. Cross River is the sponsor bank behind Stripe, Coinbase and dozens of major fintechs. Brex and Ramp manage billions in corporate card spend. Deel and Payoneer move contractor payments globally. UBS and Mastercard need no introduction. These aren't companies experimenting with blockchain for press releases - they're evaluating infrastructure that could replace or supplement their existing payment rails.

This connects directly to our coverage two weeks ago when Klarna announced KlarnaUSD, built on Bridge and launching on Tempo. At the time, we noted that a $112 billion payment processor choosing Tempo signaled something meaningful about the infrastructure. This testnet launch confirms Klarna wasn't an isolated experiment - it's part of a coordinated buildout.

What's notable is how similarly these payment-focused blockchains are being designed. Circle's Arc (launched in testnet October 28) and Tempo both feature stablecoin-native gas fees, sub-second finality, and enterprise compliance features. The shared diagnosis is clear: general-purpose chains weren't built for enterprise treasury operations. When memecoin traders can congest the same network processing your payroll, that's a problem. Both Arc and Tempo solve this with dedicated payment infrastructure.

But here's the challenge to watch. The IMF warned just last week that "the potential for making payments faster and cheaper could be undermined if there is a proliferation of stablecoins that lack interoperability". We're seeing this risk emerge in real time: Arc building one ecosystem, Tempo building another, Robinhood's L2 doing its own thing. The New York Fed found that price correlations between native and bridged stablecoins average just 0.381 - far from the 1.0 that true fungibility would require. If these networks don't interoperate seamlessly, enterprises face the same fragmentation problem seen in correspondent banking today, just rebuilt on new rails.

The other execution risk is the testnet-to-mainnet gap. IBM's blockchain history (TradeLens, World Wire) shows that enterprise projects often stall between "design partner pilot" and "production workloads at scale." Both Arc and Tempo are targeting mainnet launches in 2026, but neither has committed to a specific date. The execution risk is whether these design-partner pilots convert into production-scale payment flows on those timelines.

For institutions evaluating blockchain payment infrastructure: the competitive landscape now has two credible payment-focused L1s backed by major players - Circle and Stripe/Paradigm - both in public testing, both with enterprise-grade partners. The strategic question isn't whether payment-optimized blockchains will matter - it's which infrastructure captures network effects first, and whether interoperability emerges before fragmentation becomes permanent.

🏛️ Ten European Banks Name Their Euro Stablecoin Venture: Qivalis

The European banking consortium we first covered in October now has a name: Qivalis. And a tenth member: BNP Paribas.

The Amsterdam-based venture will bring together ING, UniCredit, BNP Paribas, CaixaBank, Danske Bank, DekaBank, KBC, Raiffeisen Bank International, SEB and Banca Sella, representing multi-trillion-euro balance sheets among Europe’s largest banks. The consortium is applying for its electronic money institution (EMI) license application with the Dutch central bank under MiCA, targeting H2 2026 launch.

Key Points:

• Leadership shows serious intent. CEO Jan-Oliver Sell previously ran Coinbase Germany, where he secured the country's first crypto custody license. Chairman Sir Howard Davies served as Deputy Governor of the Bank of England and Chairman of NatWest/RBS. This shows that they are building institutional infrastructure led by people who've operated at the center of European finance.

• ECB backing matters. ING's digital assets lead Floris Lugt (now Qivalis CFO) said the ECB has been "very supportive." The framing: strategic autonomy. Not tolerance - active support.

• The market context is stark. USD stablecoins hold ~99% of the ~$315 billion market. SocGen's euro stablecoin, launched in 2023, has just ~€64 million in circulation. Europe barely registers.

• Initial use case: crypto trading. The consortium is clear-eyed - start with euro liquidity for digital asset markets, then expand into B2B payments and corporate treasury settlement.

The Tokenized Take:

Can this compete with Tether/Circle? No. And that's not the point.

Qivalis is infrastructure for European banks to settle with each other using euro-denominated digital money that runs 24/7. So, it’s solving a different problem. European payment infrastructure evolved nationally before anyone tried to bring it together. Banks maintain connections to multiple clearing mechanisms and hold separate liquidity pools across jurisdictions. SEPA works, but SEPA Instant remains fragmented. A German bank settling with a Spanish bank still navigates a patchwork of intermediaries.

A bank-issued euro stablecoin changes that. Atomic settlement 24x7. No correspondent banking chains. No liquidity splits. If member banks accept each other's stablecoin as instantly-settled collateral, pre-funded nostro accounts will shrink dramatically.

That's treasury infrastructure, not a Tether competitor.

But consortiums are hard.

Ten banks means ten different risk appetites, ten different IT roadmaps, ten different compliance interpretations. These institutions are often competitors - ING and BNP Paribas will chase the same corporate clients. Getting alignment on governance, fee structures and technical standards requires navigating institutional politics that move slowly even in good circumstances.

We've seen this before. Trade finance consortiums struggled for years to move beyond pilots. Blockchain networks with impressive founding members stalled at production deployment. The technology is rarely the bottleneck. The governance is.

And signing up isn't the same as showing up.

Banks love consortiums. It’s a low commitment optionality - the press release, the innovation credentials, the seat at the table. But deploying Qivalis into production treasury operations requires budget allocation, IT prioritization, risk committee sign-off, and operational change management.

Some members will be ready in H2 2026. Others may still be "exploring" two years later while their treasury teams continue using correspondent banking. The gap between membership and adoption is where industry initiatives quietly stall.

The real test isn't market share. It's internal adoption.

Qivalis succeeds if member banks actually use it for settlement. If ING and UniCredit start settling cross-border payments via Qivalis, it will reduce prefunding and accelerate settlement. That's success. But if the stablecoin sits unused after its launch, that's failure regardless of what happens elsewhere.

The announcement still doesn't specify blockchain infrastructure, interoperability with existing euro stablecoins, or distribution commitments beyond wholesale pilots. These aren't minor details.

So the question isn't whether Europe can compete in stablecoins. Wrong framing.

The question is whether ten banks can agree on governance, build infrastructure, and actually adopt what they're building.

H2 2026 will tell us.

🏛️ CFTC Launches Crypto Collateral Pilot for Derivatives Markets

Four days after announcing that spot crypto can now trade on CFTC-registered exchanges, Acting Chairman Caroline Pham followed up with the plumbing to match: a pilot program allowing Bitcoin, Ether and USDC to serve as collateral in U.S. derivatives markets, beginning with a three-month initial phase.

Key Points:

• The pilot allows registered Futures Commission Merchants (FCMs) to accept BTC, ETH, and payment stablecoins like USDC as margin collateral for futures and swaps. In practice, this means a firm could post Bitcoin as collateral for a leveraged commodities position - something that sat in regulatory gray area (and was often unworkable) until this week.

• Tokenized real-world assets are included. The CFTC confirmed its rules are technology-neutral: tokenized Treasuries, money-market funds and other RWAs can qualify as collateral if they meet enforceability, custody, and valuation standards. The agency issued guidance covering eligible assets, legal enforceability, segregation and custody arrangements, haircuts, valuation, and operational risks.

• Conservative haircuts required. FCMs clearing at multiple derivatives clearing organizations must apply the most conservative haircut percentage across all DCOs - a signal that the CFTC is prioritizing adequate protection over maximum capital efficiency.

• Weekly reporting requirements apply. Participating FCMs must submit weekly reports showing total customer holdings and flag any operational issues affecting crypto collateral. The CFTC also issued a no-action letter giving FCMs permission to hold digital assets in segregated customer accounts, provided they maintain robust risk management practices.

• Outdated restrictions withdrawn. The CFTC formally pulled Staff Advisory 20-34, which previously restricted FCMs from accepting virtual currencies as customer collateral. The agency cited "substantial developments" including the GENIUS Act as rendering the 2020 guidance obsolete. Coinbase's Chief Legal Officer Paul Grewal called it "a concrete ceiling on innovation" that's now been removed.

The Tokenized Take:

Let's be clear about what this is and isn't. This is a pilot program with strict oversight, not a free-for-all. But for derivatives market participants, the practical implications are real.

Derivatives markets run on collateral. When a hedge fund takes a leveraged position, they post margin. When a commodities trader hedges exposure, they post collateral. Until now, crypto holdings had to be liquidated to cash before an institution could participate in these markets. This pilot changes that math - firms with significant crypto positions can now put those assets to work as margin directly.

The tokenized RWA piece deserves attention from treasury teams. If you're holding BUIDL or similar tokenized money market products, this pilot creates a potential path for those assets to function as derivatives collateral. That's capital doing double duty: earning yield while securing positions.

One nuance worth flagging: the regulatory paths diverge depending on what you're working with. Crypto assets got immediate operational clarity - Coinbase received same-day approval for a detailed no-action request covering crypto assets. Tokenized Treasuries and money market funds, by contrast, got a broader framework without specific implementation standards; those will develop as industry practice and the GENIUS Act regime mature. The practical implication: if you're pursuing crypto as derivatives collateral, the path is clear today. If you're pursuing tokenized RWAs, expect 6-12 months of additional guidance before it's as operationally straightforward.

The reporting and custody requirements tell you how the CFTC plans to scale this. Weekly reporting on customer holdings, defined segregation rules, conservative haircut methodologies across DCOs - this is infrastructure designed for institutional volumes. The oversight is tight. But it makes sense because the stakes are high.

Acting Chairman Pham framed it as "Americans deserve safe U.S. markets as an alternative to offshore platforms." That's the competitive angle here - recapturing derivatives activity that migrated offshore during the previous regulatory regime.

For derivatives desks, the question becomes operational: are you building the systems to accept and manage digital asset collateral? The FCMs that invest in custody integrations, valuation frameworks and risk management protocols now will be positioned when institutional demand scales. Those waiting for perfect clarity will find themselves building while competitors are already live.

📰 Some More News:

🏦 Tokenization, Stablecoins & Finance

• Abu Dhabi's Mubadala Capital explores tokenized private market access (Read more here)

• Blockchain trial on Canton Network tests collateral reuse with tokenized US Treasurys (Read more here)

• Crypto officially becomes a "third category" of property in UK, fixing fatal flaw in digital asset ownership (Read more here)

• PNC Bank launches Bitcoin trading for eligible clients via Coinbase integration (Read more here)

• Swapper Finance Launches Card Deposits to DeFi via Mastercard (Read more here)

• SEC Approves U.S.' Second Crypto Index ETP with Bitwise's BITW (Read more here)

• BlackRock files with SEC for listing of staked Ether ETF (Read more here)

🤑 Funding and M&A

• HashKey launches Hong Kong IPO seeking up to $214.7 million (Read more here)

• Real Finance secures $29M to build institutional rails for tokenized assets (Read more here)

• Pye Finance Raises $5M Seed Round Led by Variant and Coinbase Ventures (Read more here)

• Tom Lee's BitMine Buys $429 Million in Ethereum as ETH Rebounds (Read more here)

💼 Government & Policy

• Stablecoin payments a priority for 2026 as FCA outlines growth achievements (Read more here)

• IMF Flags Stablecoins as Source of Risk to Emerging Markets, Experts Say We Aren't There Yet (Read more here)

• Teachers Union Urges Senate to Scrap Crypto Market Structure Bill (Read more here)

• OCC Says Banks Can Engage in Riskless Principal Transactions in Crypto Assets (Read more here)

• UK crypto lobbying group joins Digital Chamber in cross-border policy push (Read more here)

• UK's Anti-Corruption Strategy Targets Crypto Sanctions Evasion (Read more here)

• Argentina's Central Bank to Allow Banks to Provide Crypto Services in 2026 (Read more here)

• SEC Chair Atkins confirms shock $68T timeline for tokenized markets (Read more here)

• US bank regulator clears national banks to facilitate crypto transactions (Read more here)

• Senator Booker: Low Odds for Crypto Bill Without Democrats Appointed at CFTC, SEC (Read more here)

• Senator Lummis anticipates crypto market structure markup next week (Read more here)

• Ondo Finance Says Biden-Era SEC Investigation Closed With No Charges (Read more here)

Thanks so much for reading the Tokenized Newsletter!

Please share this edition or share it with your colleagues if you enjoyed it!

Disclaimers