UAE Central Bank Approves First Regulated AED Stablecoin AE Coin

Sentiment Status: Positive

The Central Bank of the United Arab Emirates (CBUAE) granted in-principle approval for an AED stablecoin. The stablecoin is set to be the first regulated dirham-backed digital currency in the UAE.

The introduction of AE Coin follows the UAE’s Payment Token Services Regulation framework, marking it as the first legally approved stablecoin pegged to the dirham (AED). The value of AE Coin will remain consistent by being fully backed by the local currency.

The approval of AE Coin aligns with the UAE’s Digital Government Strategy 2025, an initiative aimed at driving economic growth through digital change. AE Coin’s introduction will allow both residents and merchants to access faster, more efficient payment systems. The stablecoin will also integrate with DeFi platforms.

Increased adoption of AE Coin could draw interest from fintech startups and position the UAE as a global hub for blockchain technology and digital finance. 

Looking ahead, AE Coin aims to launch partnerships with e-commerce platforms and brick-and-mortar stores, enabling residents to use it for everyday transactions. Plans for a mobile wallet are also being developed to improve accessibility.

Additionally, the stablecoin has the potential to transform international remittances, offering faster and cheaper cross-border transactions, which is especially beneficial for the UAE's large expatriate community.

Though AE Coin holds the advantage of being the first regulated AED stablecoin, it faces competition from global stablecoin giants like Tether (USDT) and USD Coin (USDC). Tether recently announced its intentions to collaborate with UAE-based companies to issue a dirham-pegged token, intensifying competition.

However, AE Coin’s local regulatory approval and backing from the UAE Central Bank has a strategic edge, setting it apart as a trusted digital asset for residents, traders, and businesses alike.