Business

UAE Crypto Firms Applaud CBUAE’s Stablecoin Licensing Initiative

Cryptography firms in the United Arab Emirates are looking forward to a year of clear rules after the CBUAE recently okayed a framework for licensing stablecoins and its firms. This came through the “Payment Token Services Regulation” where the use of the virtual currency is set to be recognized and adopted into the economy of UAE.

Jason Allegrante, the Chief Legal and Compliance Officer at Fireblocks said, “This licensing system is the first step in that direction for stablecoin development in the UAE. Regulation can unlock further innovation by offering clear rules of the game to the business and safeguards to the customers. ”

The regulation requires that stablecoins to be pegged to the UAE dirham, expected to strengthen the local crypto market and attract global investors. Arushi Goel, Policy Lead for the Middle East and Africa at Chainalysis, highlighted the significance of this development: “There is a fact that fiat currency-stablecoins can help to stabilize the token, presence of AED-backed stablecoins can help to establish a viable domestic market in cryptocurrency. ”

This has directly impacted the market by endeavouring to enhance the safety and efficiency of payment token services, safeguard reserve assets from embezzlement, and work for consumers’ benefit simultaneously with encouraging innovation. Which is expected to enhance market credibility and increase market capital for the UAE’s financial markets. These, according to Goel, shall also pave way for the equity funding from the traditional financial players like the banks to meet the needs of the, retail and institutional investors.

The UAE has numerous regulatory bodies for the different aspects of cryptocurrencies with VARA for fiat-backed stablecoin except for AED-backed, which is under CBUAE. The regulatory approach of the Dubai Financial Services Authority (DFSA) as well as the Financial Services Regulatory Authority in the Abu Dhabi Global Market (ADGM) both have their rules regarding digital assets.

According to Allegrante, “This is just one more significant process towards establishing the UAE as the primary place for digital asset development, not only for the MENA region but for the entire world. ”

This release of this licensing system is therefore aimed to place the UAE as the leader in digital currency innovation putting pressure on other countries to advance their own digital currency and licensing systems.

Suhail Hasan

Suhail Hasan is a British businessman and entrepreneur who is the COO of Fame and guest author of Dubai News.

Recent Posts

Brad Pitt’s F1 Film Leads UAE Box Office This Weekend

Cinemas in the UAE are gearing up with a big bang as the leadership weekend…

8 hours ago

UAE Ramadan and Eid 2026 Dates Announced by Emirates Astronomy Society

The Emirates Astronomy Society has published the predicted times of the major Islamic holidays in…

8 hours ago

Dubai Welcomes 8.68 Million Tourists in Early 2025 as Hotel Sector Hits New Highs

The tourism sector in Dubai keeps rising with 8.68 million visitors who are international coming…

1 day ago

Dubai’s RTA Explores Quantum Technology to Revolutionize Traffic and Transport

The Roads and Transport Authority (RTA) of Dubai is considering the future applications of the…

1 day ago

AURA Skypool Welcomes Families for the First Time with Night Swims for Kids

AURA Skypool is the world celebrated sky pool in Dubai that has finally opened its…

3 days ago

UAE Flights Delayed and Cancelled Amid Regional Airspace Closures

Air service in the UAE has been badly affected after regional airspace were closed due…

3 days ago