UAE Central Bank Approves Stablecoin Regulation Framework
CryptoNewsTerminal Staff05 Jun, 2024
UAE Central Bank Approves Stablecoin Regulation Framework
The Central Bank of the United Arab Emirates (CBUAE) has taken a significant step towards regulating stablecoins within its jurisdiction. The bank's board has approved a set of regulations that will establish a framework for the supervision and licensing of stablecoins in the UAE. According to Cointelegraph, the regulations mandate that stablecoins issued in the UAE must be pegged to the Emirati dirham (AED) and backed by appropriate reserves. The regulations also prohibit stablecoins from being linked to other digital assets or algorithms. This move by the CBUAE demonstrates the growing recognition of stablecoins as a legitimate form of digital currency. Stablecoins are designed to be less volatile than other cryptocurrencies, as they are typically pegged to a fiat currency such as the US dollar or the euro. This makes them more attractive for use in everyday transactions. The CBUAE's stablecoin regulations are expected to be finalized in the coming months. Once implemented, they will provide clarity and certainty for businesses and investors operating in the UAE's digital asset market.
