This decision was made by the board of directors during a meeting held in Abu Dhabi.
It is part of the government’s broader Financial Infrastructure Transformation (FIT) program. Let’s explore more about this important adoption news for a stablecoin in the UAE.
Abu Dhabi Board Decision
The program aims to enhance digital transactions, advance the country’s digital economy, and foster innovation. It underscores the UAE’s commitment to embracing financial technology. Among the key outcomes of the meeting was the approval of regulations governing the issuance and licensing of stablecoins.
Kokila Alagh of KARM Legal Consultants shared insights in an interview with Unlock Blockchain.
Source: wam.ae
According to Alagh, the regulations offer clarity on the issuance, licensing, and supervision of payment tokens backed by the UAE dirham (AED). Alagh emphasized that tokens must solely back AED, with no other associations.
Furthermore, merchants and service providers only permit the acceptance of AED-backed tokens, with no allowance for other virtual assets. Alagh emphasized that tokens must be backed only by AED, with no other associations.
By setting clear stablecoin guidelines, the UAE aims to boost confidence in investors, businesses, and consumers. This positioning aims to establish the UAE as a leader in financial innovation and regulation.
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