UAE launches first ever dirham-backed stablecoin
Each AE Coin is expected to enable seamless, secure payment solutions
UAE company AED Stablecoin has been granted an in-principal go signal from the country's central bank, taking us one step closer to the first regulated token pegged to the dirham: AE Coin.
The Central Bank of the United Arab Emirates (CBUAE) was behind this anticipated approval, which falls under the Payment Token Services Regulation framework.
With the license, AED Stablecoin will make its mark as the first establishment in the UAE to release stablecoins, aligning with the Digital Government Strategy 2025.
Like famous stablecoins USDT and USDC that are pegged to the US dollar, the AE Coin is meant to mirror the dirham's value.
By providing efficiency, security, and stability, the AE Coin aims to transform the financial landscape. Once it receives complete approval and sets foot in the crypto space, users, traders, and investors may use the AE coin as a local trading pair on crypto exchanges and other platforms.
It is also bound to offer enhanced everyday utility, as merchants may eventually accept it as a payment option for services.
According to Coinmarketcap, the awaited debut may position AED Stablecoin to face a tense rivalry with Tether, which is behind USDT, the largest stablecoin in the world when it comes to market capitalization.
UAE CENTRAL BANK GREENLIGHTS AED STABLECOIN
— BSCN (@BSCNews) October 14, 2024
- The Central Bank of the United Arab Emirates (CBUAE) has officially granted in-principle approval to AED Stablecoin under its Payment Token Service Regulation framework.
- This approval makes AED Stablecoin the frontrunner to… https://t.co/UnScFEkPLf pic.twitter.com/hKyCwoT4MT
The CBUAE's licensing framework largely prefers fully cash-backed assets over algorithmic and privacy tokens. With this, issuers should follow the prerogative of supporting their stablecoins with cash in a UAE bank.
