UAE to Create its Own Stablecoin Linked to the Dirham
While Tether remains on the sidelines, AED Stablecoin LLD is positioning itself as a leading contender to issue the first regulated stablecoin pegged to the dirham in the United Arab Emirates.
According to a recent announcement , the Central Bank of the UAE (CBUAE) has granted the issuer preliminary approval under its framework for the regulation of payment coin services.
This development helps ease concerns about potential restrictions on crypto payments following the CBUAE’s introduction of its licensing framework, which prohibits crypto payments unless they involve licensed tokens linked to the dirham.
If fully approved, “AE Coin” will serve as a local trading pair for cryptocurrencies across exchanges and decentralized platforms, while allowing merchants to accept it for goods and services.
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Robert Kiyosaki Issues Another Major Warning on the U.S. Dollar InstabilityThe central bank’s framework also excludes algorithmic stablecoins and privacy tokens, prioritizing fully-backed stablecoins. Issuers are required to fully back their tokens with cash in dirham-denominated escrow accounts at a UAE bank.
Alternatively, issuers of stablecoins may hold at least 50% of the reserve assets as cash, with the remainder invested in UAE government bonds or CBUAE bonds maturing within six months.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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