AED Crypto Coin News: UAE Approves Dirham-Pegged Stablecoin

AED Crypto Coin News: Dirham Stablecoin Gains Regulatory Nod

In-principle Approval from UAE Central Bank 

The Central Bank of the United Arab Emirates (CBUAE) has granted AED Stablecoin preliminary approval to issue the nation’s first regulated dirham-pegged stablecoin. This approval, under the Payment Token Service Regulation framework, positions AED Stablecoin as the front-runner in a competitive market. The approval eases concerns surrounding restrictions on crypto payments, as the new regulatory framework allows licensed dirham-pegged tokens for payment use.

Opportunities for AED Stablecoin

With full approval, AED Stablecoin’s AE Coin could serve as a major trading pair for cryptocurrencies on exchanges and decentralized platforms. It would enable merchants to accept the stablecoin for goods and services, providing a regulated alternative for digital payments in the UAE. This development strengthens the UAE’s efforts to embrace blockchain technology within a regulatory framework, paving the way for innovative financial services.

Strict Regulations for Stablecoin Issuers 

The CBUAE’s framework requires stablecoin issuers to maintain cash-backed reserves. Issuers must either hold their reserves fully in dirhams in a UAE bank or ensure that at least 50% of their assets are in cash, while the remainder can be invested in UAE government bonds or CBUAE Monetary Bills. This regulation ensures stability and trust in the local financial market, especially as algorithmic stablecoins and privacy tokens are prohibited under the framework.

Competition from Tether 

The race to launch a regulated stablecoin in the UAE is heating up, with Tether, the issuer of USDT, also planning to introduce a dirham-pegged stablecoin. Tether has partnered with Phoenix Group and Green Acorn Investments to enter the UAE market. Given Tether’s dominance in the global stablecoin market, the competition between AED Stablecoin and Tether could shape the future of digital payments in the region.

UAE’s Growing Crypto Ecosystem 

The UAE’s crypto friendly regulatory environment continues to attract major players, such as OKX and M2, which have launched platforms for crypto trading and direct dirham-to-crypto conversion. As more regulated services emerge, the UAE solidifies its position as a global crypto hub.

Also Read:- OKX Launches in Dubai Despite UAE Regulatory Crackdown