- The Central Bank of the United Arab Emirates (CBUAE) has granted preliminary approval for a dirham-pegged stablecoin (AE Coin).
- Accepted under the Payment Token Service Regulation, AE Coin aims to make crypto more accessible in the Emirates.
- It’s poised to bring many advantages to the financial sector, including more stable and transparent transactions than traditional banking methods.
The CBUAE has given AED Stablecoin in-principle approval to establish its own fiat-backed virtual currency.
AED Stablecoin’s green light places AE Coin at the forefront of becoming the first regulated dirham-pegged stablecoin in the Emirates.
If fully approved, the virtual currency could make crypto payments easier, providing Emirate-based businesses and individuals with new opportunities to thrive in the digital economy.
AE Coin to Improve the Emirates’ Finance Sector
According to recent Chainalysis data, the UAE is the third-largest crypto economy in the Middle East and North Africa (MENA).
AE Coin (accepted under the Payment Token Service Regulation framework) is designed to improve the Emirate’s financial services.
It’s equipped to offer many benefits, including:
- Security and stability due to being fiat-backed (by the dirham)
- Traceable and transparent transactions through blockchain technology
- Domestic transfers making financial transactions faster and more efficient than traditional banking methods
- dApp compatibility so that UAE citizens can partake in DeFi activities easily
The stablecoin’s roadmap includes forming alliances with payment gateways and financial institutions to boost widespread crypto adoption across the UAE.
Additionally, plans are reportedly underway for listing on major exchanges for seamless AE Coin access.
7 Unlicensed Crypto Entities in Dubai Faced Hefty Fines
Despite Dubai’s Virtual Assets Regulatory Authority (VARA) recently fining seven unlicensed crypto businesses (from $13K to $27K each), the UAE is increasingly enhancing its crypto acceptance.
VARA’s regulatory framework is stringent, requiring virtual asset providers to maintain a legal entity in the Emirates and reserve assets equivalent to 100%. Those violating marketing regulations are penalized.
By charging non-compliant crypto firms, VARA aims to protect individuals from those offering unlawful crypto services. The Authority ensures investors are provided with transparency and security.
Verdict – The Middle East’s Crypto Landscape Looks Hopeful
With secure, innovative developments in the pipeline poised to improve the Middle East’s financial landscape, the Emirates’ crypto future seems to be thriving.
Meanwhile, VARA’s fines underscore the UAE’s commitment to safeguarding the crypto space’s credibility and its users.
As stablecoin issuance broadens worldwide, this type of digital currency is projected to become a mainstream payment method worldwide. And the UAE is riding the trend.
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