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UAE Just Dropped Stablecoin Rules: Here's What It Means

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The Central Bank of UAE just gave the green light on stablecoin regulations, and it’s stricter than you might think.

The core rules:

  • All payment tokens MUST be 1:1 backed by UAE Dirham (AED)
  • No pegging to other currencies, crypto, or algorithms allowed
  • Merchants can only accept AED-backed tokens—no other digital assets

This is basically the UAE saying: “We want stablecoins, but our way.” Not a blanket ban like some countries, but also not a free-for-all.

Why it matters: It’s a middle-ground approach. The CBUAE is protecting financial stability while opening the door to digital payments. Instead of fighting stablecoins, they’re bringing them under control—similar to what Singapore and Switzerland are doing.

The catch: Projects building on other stablecoins (USDT, USDC) or algorithmic tokens need to pivot or exit the market. Only AED-backed tokens get the stamp of approval.

Bottom line: UAE is building a regulated stablecoin ecosystem, not an open one. Good for institutional adoption, restrictive for innovation. Classic move: stability over experimentation.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
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