The Central Bank of the United Arab Emirates has announced that it has given the green light to the first stablecoin backed by the UAE Dirham. This latest development came through an X post from AE Coin on Tuesday after the Central Bank released its payment token services framework. AE Coin has positioned itself to become the first local stablecoin in the UAE as it continues to drive change in the country’s financial market.
Surge in Stablecoin Activity
According to Khaleej Times, AE Coin aims to provide several advantages for both consumers and companies. Intended to be secure, stable, low-cost, and very efficient, it is meant to disrupt the digital payment market in the UAE. AE Coin will be tied one to one with the UAE Dirham and is anticipated to make transactions easier, and more accessible. It is set to foster innovation within e-commerce, remittances, and decentralized finance (DeFi).
Blockchain-Driven Innovation
Ramez Rafeek, the General Manager of AE Coin, revealed the stability and speed possible with blockchain’s help. AE Coin aims to be the new standard of trust, security, and innovation in the digital world, where these currencies are becoming more popular. He stated:
AE Coin is built on blockchain technology, and designed to provide users with stability, efficiency and security in their transactions.
The launch of AE Coin has received the nod from the Central Bank after several months of waiting and an initial positive vetting of the product. With the launch of the first AED stablecoin, UAE businesses’ financial inclusion is anticipated to improve as they gain access to modern financial instruments.
Singapore Gulf Bank Raises $50M for Stablecoin ExpansionSurge in Stablecoin Activity
Based on Chainalysis, the stablecoin market in the UAE has grown in 2024. The stablecoin inflow in UAE services (CEX and DEX) was recorded at more than $9.8 billion in the first half of the year, a 55% hike from H1 2023. Bitcoin and Ether represent 28% of transactions, while stablecoins account for 51% of all crypto transactions in the UAE.
Retail transactions, especially those below $10,000, are the most common in the UAE and represent 93% of stablecoin transfers. This is evidence of stablecoins as the most preferable means of engaging in regular crypto trade in the region due to the ever-evolving and fast-growing crypto market.
