Businesses in the UAE will soon be able to accept AE Coin, the country’s first officially regulated cryptocurrency.
The Central Bank of the UAE has granted regulatory approval for AE Coin, a stablecoin tied to the dirham, offering lower volatility compared to other digital currencies. Stablecoins are digital currencies linked to traditional government-issued currencies to maintain consistent value.
“AE Coin leverages blockchain technology to provide secure, stable, and efficient transactions,” said Ramez Rafeek, AE Coin’s general manager, in a LinkedIn post announcing the Central Bank’s approval.
Speaking with The National, Rafeek confirmed the coin would be available “soon.” He highlighted that the coin is fully backed by reserves held within the UAE, ensuring its stability and reliability as a means of exchange.
The approval follows updated cryptocurrency regulations introduced by the Central Bank in July, allowing dirham-backed stablecoins while restricting the use of other digital currencies, such as bitcoin and dollar-pegged stablecoins, for payments within the UAE. Financial-free zones remain exempt from these rules.
To issue a payment token, UAE crypto businesses will need to submit a white paper and obtain approval from the Central Bank, adding an extra layer of security checks before public release.
Rafeek emphasized AE Coin’s potential to enable faster, cost-effective transactions and enhance trust in digital currencies. The coin will be distributed through a network of authorized agents.
Globally, the stablecoin market is worth over $207.5 billion, driven by major players such as Tether and Binance USD. Tether, with a $138 billion market cap, has announced plans to launch its own dirham-backed stablecoin in the UAE, alongside its existing stablecoins linked to the euro, Mexican peso, yuan, and gold.
