Ukraine tops in stablecoins, crypto’s most democratized use case

Stablecoins are crypto’s most democratized use case, and no democracy is putting them to better use than war-torn Ukraine.

This week saw Abu Dhabi’s digital asset regulator clear the way for the two leading U.S. dollar-denominated stablecoins (and one minor player) to operate within the Abu Dhabi Global Market (ADGM), the International Financial Center (IFC) of the United Arab Emirates’ capital city.

On December 8, Tether—issuer of the market-leading USDT stablecoin (market cap: $186.2 billion)—announced that ADGM’s Financial Services Regulatory Authority (FSRA) had recognized USDT as an Accepted Fiat-Referenced Token (AFRT) within ADGM.

ADGM-Authorized Persons can now offer ‘regulated activities’—trading, custody, and other services—with USDT on nine additional networks, including Aptos, Kaia, Polkadot, TON, and TRON. Those networks followed the FSRA’s previous approvals of USDT on Ethereum, Solana and Avalanche one year ago this month.

On December 9, Circle (NASDAQ: CRCL)—issuer of the USDC stablecoin (market cap: $78.3 billion) announced that it had received a Financial Services Permission (FSP) license from the FSRA, allowing Circle to operate as a Money Services Provider within the IFC. Circle received in-principle approval for its FSP application in April, while its USDC and euro-backed EURC tokens received the first stablecoin approvals from the Dubai Financial Services Authority (DFSA) in March.

Last month, the ADGM offered Accepted Fiat-Referenced Token recognition to Ripple Labs’ dollar-denominated stablecoin RLUSD (market cap: $1.3 billion). The recognition followed digital-focused Zand Bank and payment processor Mamo, enabling Ripple’s blockchain-based payments offering in the UAE this spring.

ADGM’s chief market development officer, Arvind Ramamurthy, congratulated Ripple, adding that Abu Dhabi’s regulatory framework is “designed to support the sustainable growth of innovative firms and ensure the highest international standards of governance and compliance.”

The UAE has indeed been at the forefront of regulatory acceptance of stablecoins, including this spring’s announcement of plans for a dirham-backed stablecoin issued by the First Abu Dhabi Bank in a partnership with Abu Dhabi’s International Holding Company (IHC) and sovereign investor ADQ.

Circle keeps wheeling and dealing

Circle’s Abu Dhabi announcement also detailed the company’s appointment of Dr. Saeeda Jaffar as Managing Director for Circle Middle East & Africa (MEA). Jafar currently serves as senior VP of the Gulf Cooperation Council region for payments giant Visa (NASDAQ: V), with which Circle has partnered on a number of stablecoin-focused projects (and Visa just announced its own CEMEA expansion project with AquaNow).

Circle’s announcements have flown fast and furious this month, including the launch of the Circle Foundation, a “philanthropic initiative dedicated to advancing financial resilience and inclusion in the U.S. and around the world.” The Foundation will support “groups that strengthen the financial systems people rely on every day,” including U.S. and international efforts to modernize “the infrastructure of humanitarian aid.”

On a more selfish level, Circle announced a collaboration with machine agency firm OpenMind on a proposal to “bring USDC-powered micropayment protocols to life and shape the infrastructure for autonomous, real-world AI transactions.”

This agentic payments proposal, based on Circle’s chain-agnostic Gateway framework, aims to facilitate “high-throughput applications such as agents performing deep research tasks and paying for content as they go.” Circle said it plans to release its new facilitator in testnet “soon,” after which the Github community will get a chance to take this vehicle out for a spin around the block and give their feedback.

In one of its more interesting announcements, Circle has debuted a new “private and programmable” version of USDC (USDCx) on the Aleo network’s testnet. Aleo is a network based around zero-knowledge proofs ZKPs), technology that allows one party to prove to a second party that a fact is true without having to submit additional information regarding said fact.

USDCx is “engineered to deliver security and enable seamless crosschain transfers into USDC without relying on third-party bridging services.” USDCx will be built around Circle xReserve, a non-custodial smart contract and infrastructure that chief commercial officer Kash Razzaghi claims will “bring trust, transparency, and responsible innovation to the heart of internet-native finance.”

While a privacy coin may seem like an odd development for Circle, which prides itself on calling USDC ‘the compliant stablecoin,’ each USDCx transaction will generate a ‘compliance record’ that Circle can access in the event that law enforcement comes calling with a subpoena. Aleo co-founder Howard Wu told Fortune that USDCx will offer “banking-level privacy, as opposed to ‘privacy privacy.’”

Circle is targeting USDCx at businesses and financial institutions whose clients want to enjoy the speed of blockchain tech without sharing their full financial details with the world (or worrying about the price volatility of non-pegged privacy tokens like Zcash).

Circle also announced a strategic partnership with Bybit, the second-largest (in terms of trading volume) digital asset exchange. The partnership “aims to expand USDC access across Bybit’s global ecosystem,” with the exchange promising to “enhance USDC liquidity across spot and derivatives markets, enabling a more efficient trading environment for retail and institutional users.”

This USDC integration will include Bybit Earn (savings), Bybit Card (rewards), and Bybit Pay (transactions), which the parties will heavily promote to customers. Bybit was among the companies to participate in the October testnet launch of Circle’s Layer-1 USDC-payments-focused Arc network, and the new partners plan to “explore deeper integrations to unlock new opportunities for cross-chain liquidity and institutional-grade financial solutions.”

Circle declined to specify how much it would be paying Bybit for this access, but it’s likely pretty steep. The cost of Circle’s earlier deals with exchanges like Binance and Circle’s former USDC partner, Coinbase (NASDAQ: COIN), were laid bare in Circle’s Q2 earnings report, which showed $407 million in ‘distribution and transaction’ costs. These costs hit $448 million in Q3, “primarily from increased distribution payments” and “other strategic partnerships.”

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Stablecoin adoption’s geographical quirks

Web traffic to centralized exchanges and decentralized finance (DeFi) protocols is “significantly lower in low-GDP countries,” suggesting consumers in these markets prioritize functionality over speculation.

The report also found “virtually no engagement” with crypto banking and payment platforms in low GDP per capita countries, “yet many of them still register high stablecoin activity … users in these regions are not using crypto for direct payments through formal services, but rather for remittances, informal transfers, or basic saving, often through lightweight apps.”

Among the more intriguing findings is that Ukraine ranked 13th for overall crypto adoption, but the country is the global leader in terms of stablecoin usage relative to its economic size. The report cites $6.9 billion in stablecoin flows against a GDP of $190 billion, a 3.6% ratio. “Crypto has become a financial lifeline in the context of war, where banking infrastructure is disrupted and cross-border flows are vital.”

Runner-up Nigeria was a distant second with a flow-to-GDP ratio of 1.2%, followed by Georgia at 1.06%. At the opposite end of this spectrum, the United States ranked dead last among the 61 countries profiled with just 0.11% flow-to-GDP, narrowly beating out Switzerland (0.14%), suggesting an inverse ratio between stablecoin usage and having a well-established and trusted banking/financial system.

Nigeria was described as “a textbook case of grassroots crypto adoption, where market-driven stablecoins [mostly USDT] have outpaced state-led digital currency efforts.” The driving factors behind this adoption are said to be structural: “chronic naira devaluation, tight capital controls, high remittance flows, and persistent mistrust of local financial institutions.”

By comparison, stablecoin adoption in Hong Kong is “not a story of inflationary escape or financial exclusion, but of navigating a complex monetary environment.” Exporters/importers want to avoid China’s capital controls and settle cross-border transactions “quickly and cheaply in a region burdened by bureaucratic hurdles, strict compliance requirements, and deep reliance on mainland China’s monetary framework.”

The report cites three trends likely to shape the next phase of stablecoin adoption: geopolitical currency competition (tokens denominated in local currencies rather than USD), institutional integration (as tradfi channels incorporate stablecoin rails), and regulatory convergence (leading jurisdictions setting common standards).

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UK says stablecoin regulation a priority for 2026

An example of regulatory convergence is the Transatlantic Taskforce for Markets of the Future that was established earlier this year between the U.S. and the U.K.

The transatlantic cooperation also extends to the private sector, as evidenced by this week’s announcement of the CryptoUK advocacy group joining forces with America’s The Digital Chamber. The pair plan to jointly advocate for “responsible regulation that enables global blockchain and digital asset innovation to thrive while protecting consumers’ access to digital assets.”

The parties have signed a formal agreement that will bring CryptoUK’s team and members under The Digital Chamber umbrella to create “a unified, cross-border advocacy platform.” CryptoUK exec director Su Carpenter said the deal “will strengthen both organizations by enabling cross-jurisdictional knowledge sharing and access to broader resources.”

America is far ahead of England in terms of regulating stablecoins, but the U.K. has, of late, been making a concerted effort to put its foot on the gas pedal.

In November, the Bank of England (BoE) opened a stablecoin consultation, which is accepting recommendations until February 10. Later that month, the Financial Conduct Authority (FCA) announced the launch of a “stablecoin-specific cohort in our Regulatory Sandbox” and invited the industry to participate (applications due January 18).

This week, the FCA sent Prime Minister Keir Starmer a letter detailing its 2025 accomplishments and its goals for 2026. The FCA has set a goal to “finalize digital assets rules and progress UK-issued sterling stablecoins.” The FCA’s official press regarding this letter was given the headline: “Stablecoin payments a priority for 2026 as FCA outlines growth achievements,” so presumably they mean it.

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Malaysia ringgit in the new year

While dollar/sterling/euro stablecoins are getting all the press, the geopolitical currency competition referenced in the Bybit report is on full display in Malaysia, which is welcoming the first ringgit-backed stablecoin courtesy of a member of the country’s royal family.

On Tuesday, Bullish Aim Sdn. Bhd., the Malaysian telecom operator controlled by His Royal Highness Tunku Ismail Ibni Sultan Ibrahim, the Regent of Johor, announced the launch of the ringgit-backed RMJDT. The token was issued on Zetrix, the Layer-1 network behind the Malaysia Blockchain Infrastructure project, which debuted in April after several years of discussion.

According to the royal founder, RMJDT is “designed to strengthen the international use of the Malaysian Ringgit in cross-border trade settlements and to act as a catalyst for attracting increased foreign direct investment into Malaysia.”

Bullish Aim’s managing director, Lion Peh, told Bloomberg that the goal is for RMJDT “to become the standard for crypto-based payments in Malaysia—empowering businesses, consumers, and innovators with a faster, safer, and more efficient way to transact.”

To boost adoption, Bullish Aim will establish an RMJDT-based digital asset treasury (DAT) firm—known only as DATCO at present—to play “a pivotal role in ensuring stable network gas fees for RMJDT transactions.” DATCO will have an initial allocation of RM500 million (US$122 million) in Zetrix tokens, with an eventual target of RM1 billion.

The announcement cites the example set by leading DATs such as Strategy (NASDAQ: MSTR) and BitMine Immersion Technologies (NASDAQ: BMNR), which ‘treasury’ BTC and ETH tokens, respectively. However, most DATs are now struggling to keep their mNAVs (market cap vs. the value of the tokens they hold) above the 1.0 mark, making this a questionable step in an otherwise sensible plan.

DATCO plans to stake Zetrix tokens to support up to 10% of the Malaysian Blockchain Infrastructure validator nodes. RMJDT’s royal founder was quoted saying, “we view the establishment of a Zetrix-token treasury as a strategic necessity—both to support operational stability and to deepen alignment with the national blockchain.”

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