Changer and Tether target regulated cross-border settlements

Changer. ae and Tether have signed a memorandum of understanding to examine regulated cross-border settlement services using USD₮, expanding efforts to build institutional digital asset infrastructure within Abu Dhabi Global Market.

The agreement brings together Changer, an Abu Dhabi-based virtual asset custodian regulated by the Financial Services Regulatory Authority, and Tether, issuer of the world’s largest dollar-linked stablecoin. The companies will assess USD₮-to-fiat conversion services, virtual asset transfers and blockchain systems intended to improve transaction speed, security and interoperability.

Any product or commercial service developed under the partnership will remain subject to the companies’ existing regulatory permissions and further approvals where required. The memorandum does not by itself authorise the launch of payment, conversion or settlement products.

The initiative places cross-border transactions at the centre of the collaboration. Stablecoins can move across blockchain networks around the clock, potentially reducing reliance on multiple correspondent banks and shortening settlement times. Businesses conducting international trade may also benefit from clearer transaction tracking and lower operational friction, although conversion, custody and compliance costs remain important considerations.

Changer and Tether plan to evaluate infrastructure that could connect regulated virtual asset activity with conventional currencies. Their work will include custody, conversion and transaction services, alongside systems designed to support institutions seeking compliant access to blockchain-based finance.

Paolo Ardoino, chief executive of Tether, said the UAE was developing into a leading centre for digital assets, supported by a progressive regulatory framework. He said the collaboration would seek to advance responsible digital asset use while matching innovation with trust, transparency and compliance.

Wang Hao, senior executive officer of Changer. ae, said the partnership would explore secure and efficient blockchain-powered services for businesses. The company expects the work to strengthen financial connectivity and contribute to the development of ADGM’s digital economy.

The memorandum also covers educational programmes and industry development. Workshops, webinars, executive masterclasses and forums are planned to improve understanding of blockchain applications, digital transformation and regulated virtual asset services.

The companies intend to connect investors, technology providers, corporate groups and portfolio companies. Such engagement could help identify commercial applications for stablecoins in treasury operations, international supplier payments, digital asset trading and institutional settlement.

Changer received Financial Services Permission from ADGM’s regulator in 2023 and is authorised to provide custody services involving accepted virtual assets. Its status requires compliance with custody safeguards, technology governance, internal controls and other supervisory requirements.

USD₮ has a market capitalisation exceeding $180 billion and a user base estimated at more than 550 million. Its scale has made it a major source of dollar-denominated liquidity across cryptocurrency exchanges, payment services and blockchain networks. Tether has also expanded investment in tokenisation, payments infrastructure and regulated stablecoin projects across several markets.

The partnership comes as the UAE develops separate but connected frameworks for virtual assets, payment tokens and financial free zones. ADGM regulates virtual asset activities within its jurisdiction, while the Central Bank of the UAE oversees payment token services across the wider country, excluding financial free zones.

Central bank rules covering payment tokens took effect in August 2024. They require licensing or registration for payment token issuance, conversion, custody and transfer services. The regulations prohibit algorithmic stablecoins and impose risk management, customer protection and anti-money-laundering obligations on authorised providers.

Those rules also place restrictions on the use of foreign-currency payment tokens for purchases within the UAE. Dollar-backed tokens may be used in defined virtual asset transactions where the issuer and service provider meet applicable registration and licensing conditions.

The distinction between a virtual asset used for investment or settlement and a token used as a general means of payment will shape any service emerging from the Changer-Tether partnership. Regulatory classification could determine which authority supervises the activity and what approvals are needed before customers can use it.

Stablecoins are drawing greater interest from banks, payment companies and multinational businesses because they offer continuous settlement and programmable transfer capabilities. At the same time, regulators are focusing on reserve quality, redemption rights, sanctions screening, cybersecurity and the risk of illicit transfers.