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<a href="https://optimisus.com/news/uae-and-vietnam-lead-in-global-crypto-adoption/" rel="noopener noreferrer nofollow">The UAE Central Bank</a> has introduced a new regulation on stablecoins, set to take effect in June 2025. The regulation restricts the use of major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) for transactional purposes, allowing only dirham-backed stablecoins for payments within the Emirates.
The aim is to provide clarity and reduce legal uncertainties for businesses, encouraging secure interactions between FinTech companies and virtual asset service providers (VASPs). Financial free zones are exempt from this rule, allowing some flexibility for international business operations.
The regulation will recognize specific use cases for foreign payment tokens, including non-fungible tokens (NFTs), to promote collaboration between FinTech firms and VASPs.
A phased approach will allow time for the development of a dirham-backed stablecoin, ensuring a smooth transition for stakeholders. Bitcoin and Ether will be relegated to investment and trading purposes, remaining integral to corporate treasuries and investment portfolios.
The global stablecoin market is expanding rapidly, with stablecoin purchases reaching $40 billion in March 2024. The new UAE regulation emphasizes the need for robust oversight, reflecting lessons learned from past market collapses.
Dirham-backed stablecoins can be private entities backed by reserves or function as central bank digital currencies (CBDCs) if issued by the <a href="https://optimisus.com/market/market-news/binance-czs-4-5b-equity-offer-fails-to-secure-urgent-uae-visit-again/" rel="noopener noreferrer nofollow">UAE</a> Central Bank. Banks are not directly permitted to issue payment tokens but can do so through subsidiaries or affiliates, provided they meet licensing and regulatory requirements.
The post <a href="https://optimisus.com/news/crypto-news/the-uae-central-bank-approves-a-framework-for-stablecoin-regulation/" rel="noopener noreferrer nofollow">The UAE Central Bank approves a framework for stablecoin regulation</a> appeared first on <a href="https://optimisus.com" rel="noopener noreferrer nofollow">Optimisus</a>.

The UAE Central Bank approves a framework for stablecoin regulation

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Alte articole publicate pe 23 iul. 2024

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