UAE Approves Licensing System for Stablecoins

The Central Bank of the United Arab Emirates (CBUAE) Board of Directors has approved a new system for the supervision and licensing of stablecoins.

During a meeting in Abu Dhabi, they discussed projects under the government's Financial Infrastructure Transformation (FIT) program, which aims to promote digital transactions, the digital economy, and innovation. The meeting was chaired by UAE Vice President and CBUAE Chairman Sheikh Mansour bin Zayed Al Nahyan, and attended by Vice Presidents Abdulrahman Saleh Al Saleh and Jassem Mohammad Al Zaabi, CBUAE Governor Khaled Mohamed Balama, and other members of the central bank board of directors.

The board approved the issuance of regulations for stablecoin licensing and supervision. According to an interview with local media Unlock Blockchain, Kokila Alagh, founder of KARM Legal Consultants, stated that these regulations clarify the issuance, licensing, and supervision of payment tokens backed by the UAE dirham.

Additionally, Alagh mentioned that payment tokens must be backed by the UAE dirham and cannot be linked to other currencies, digital assets, or algorithms. She emphasized that vendors and service providers can only accept dirham-backed tokens, excluding other virtual assets.#stablecoin #Stablecoins