The Central Bank of the UAE (CBUAE) has granted in-principle approval to AED Stablecoin, making it the first issuer of a regulated dirham-pegged stablecoin, AE Coin.
This approval falls under the CBUAE’s new Payment Token Services Regulation, aligning with the UAE’s Digital Government Strategy 2025.
Although this license doesn’t grant full operational authority, it’s a critical step toward launching AE Coin as a local trading pair and payment method in the UAE.
Under the new framework, stablecoins must be fully cash-backed and held in escrow accounts denominated in dirhams or backed by secure assets like government bonds. Algorithmic and privacy-based stablecoins are prohibited.
If fully approved, AE Coin could expand the use of digital payments for everyday transactions in the UAE, competing with established players like Tether.
Meanwhile, Dubai’s Virtual Assets Regulatory Authority (VARA) is tightening its grip on virtual asset promotions, recently fining several companies for violations and unlicensed operations.
These regulations are part of the broader effort to ensure transparency, trust, and responsible virtual asset service delivery in the UAE.
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