{"id":11840,"date":"2024-10-14T18:28:20","date_gmt":"2024-10-14T18:28:20","guid":{"rendered":"https:\/\/www.cryptometer.io\/news\/?p=11840"},"modified":"2024-10-14T17:28:28","modified_gmt":"2024-10-14T17:28:28","slug":"uae-central-bank-grants-preliminary-approval-to-aed-stablecoin","status":"publish","type":"post","link":"https:\/\/www.cryptometer.io\/news\/uae-central-bank-grants-preliminary-approval-to-aed-stablecoin\/","title":{"rendered":"UAE Central Bank Grants Preliminary Approval to AED Stablecoin"},"content":{"rendered":"\n<p>The Central Bank of the United Arab Emirates (CBUAE) has given in-principle approval to AED Stablecoin, setting the stage for the country\u2019s first regulated dirham-pegged digital currency. This announcement positions AED Stablecoin as the frontrunner in a competitive race to launch a stablecoin backed by the UAE dirham.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">AED Stablecoin Takes the Lead Amid Regulatory Changes<\/h3>\n\n\n\n<p>The preliminary license, issued under the CBUAE\u2019s Payment Token Service Regulation framework, is a key milestone in the UAE\u2019s efforts to regulate crypto payments. It addresses growing concerns about restrictions on digital currency use, which surfaced after the CBUAE\u2019s new licensing framework prohibited crypto for payments\u2014except for licensed dirham-backed tokens.<\/p>\n\n\n\n<p>If AED Stablecoin receives full approval, its AE Coin could serve as a vital trading pair on exchanges and decentralized finance (DeFi) platforms. Additionally, merchants across the UAE would be allowed to accept it for transactions, creating new opportunities for crypto adoption.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Regulatory Framework: Strict Backing Requirements<\/h3>\n\n\n\n<p>The CBUAE\u2019s framework prioritizes fully cash-backed stablecoins and bans both algorithmic stablecoins and privacy tokens. To comply, issuers like AED Stablecoin must meet stringent reserve requirements:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Escrow Cash Requirement<\/strong>: Stablecoins must be backed 100% by dirham-denominated cash held in a segregated escrow account within a UAE-based bank.<\/li>\n\n\n\n<li><strong>Partial Reserve Option<\/strong>: Alternatively, issuers can hold at least 50% in cash, with the remainder invested in UAE government bonds and CBUAE Monetary Bills with a maximum maturity of six months.<\/li>\n<\/ul>\n\n\n\n<p>These safeguards are designed to ensure the stability and trustworthiness of dirham-pegged tokens.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Tether\u2019s Arrival Looms as Competition Builds<\/h3>\n\n\n\n<p>With Tether (USDT) eyeing a potential entry into the UAE\u2019s stablecoin market, AED Stablecoin\u2019s in-principle approval gives it a competitive edge. However, Tether\u2019s arrival could intensify competition, as the UAE positions itself as a hub for regulated digital finance.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Central Bank of the United Arab Emirates (CBUAE) has given in-principle approval to AED Stablecoin, setting the stage for the country\u2019s first regulated dirham-pegged digital currency. This announcement positions AED Stablecoin as the frontrunner in a competitive race to launch a stablecoin backed by the UAE dirham. AED Stablecoin Takes the Lead Amid Regulatory [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":9624,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[259,43],"tags":[],"class_list":{"0":"post-11840","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-altcoins","8":"category-general-news"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>UAE Central Bank Grants Preliminary Approval to AED Stablecoin<\/title>\n<meta name=\"description\" content=\"The Central Bank of the United Arab Emirates (CBUAE) has given in-principle approval to AED Stablecoin, setting the stage for the country\u2019s first\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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