The United Arab Emirates (UAE) is on the verge of launching AE Coin, the country’s first national stablecoin, following regulatory approval in December 2024. This development is a key component of the UAE’s broader digital currency strategy, which aims to enhance retail payments and solidify the nation’s role as a global financial hub.
The UAE Central Bank first introduced its digital currency strategy, called “Digital Dirham,” in March 2023, alongside new regulatory frameworks for stablecoins. As part of this strategy, the bank has also revealed a new digital dirham symbol and a comprehensive operational framework for cryptocurrencies, including stablecoins, designed to foster wider adoption.
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Stablecoins, which are cryptocurrencies pegged to stable assets like the US dollar, offer a less volatile alternative to traditional cryptocurrencies. They are expected to streamline financial transactions, especially for migrant workers and small businesses, enabling cost-effective and instant transfers. This move aligns with the UAE’s goal of improving the efficiency of international money transfers, particularly as it is a major remittance hub.
Globally, stablecoins have gained traction as a tool for financial inclusion, particularly in regions with limited access to traditional banking. In the UAE, approximately 93% of stablecoin transfers are retail-sized, emphasizing their potential to democratize access to digital finance. With countries like El Salvador, Australia, and China already integrating stablecoins into their financial systems, the UAE’s launch of AE Coin follows a global trend.
Experts believe that for stablecoins to succeed, clear regulatory frameworks, transparency, and strong consumer protection measures will be essential. With financial institutions worldwide exploring stablecoin technology, the UAE’s regulatory environment could set a precedent for other nations looking to integrate digital currencies into mainstream finance.
