NEWS
The board of directors of the Central Bank of the United Arab Emirates (CBUAE) has approved the issuance of a new system to oversee and license stablecoins.
During a meeting in Abu Dhabi, the board discussed several projects under the government’s financial infrastructure transformation (FIT) program. This initiative aims to enhance digital transactions, advance the country’s digital economy, and foster innovation.
The meeting was chaired by UAE Vice President and CBUAE Chairman Sheikh Mansour bin Zayed Al Nahyan. Attendees included Deputy Chairmen Abdulrahman Saleh Al Saleh and Jassem Mohammad Al Zaabi, CBUAE Governor Khaled Mohamed Balama, and other board members of the central bank.
In this meeting, the board approved the issuance of a regulation for overseeing and licensing stablecoins. In an interview with local media outlet Unlock Blockchain, Kokila Alagh, founder of KARM Legal Consultants, explained that the new regulations clarify the issuance, licensing, and supervision of dirham-backed payment tokens.
Additionally, the UAE lawyer stated that payment tokens must be backed by UAE dirhams and cannot be linked to other currencies, digital assets, or algorithms. She added that merchants and service providers are only permitted to accept dirham-backed tokens and no other virtual assets.
While specific details of the meeting have not been disclosed, the topics reportedly included key projects under the FIT program. On February 13, the CBUAE announced plans to issue a central bank digital currency (CBDC) as part of the FIT initiative.
The issuance of a CBDC aims to address inefficiencies in cross-border payments and drive domestic payment innovation. According to the CBUAE, issuing a CBDC would help bolster the UAE’s competitiveness as a financial and digital payments hub.
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