The UAE Central Bank is turning its attention to the stablecoin market as it intensifies its efforts to promote innovation and digital financial transactions in the country.
The Board of Directors of the Central Bank of the United Arab Emirates, headed by Chairman, His Highness Sheikh Mansour bin Zayed Al Nahyan, has given the green light to issue a regulation to supervise and license stablecoins, the Emirates News Agency (WAM) reported on June 3.
The committee also agreed to introduce other policies to support the local banking and insurance sectors and services related to the financial infrastructure.
The agenda item for the digital assets meeting is part of the central bank’s deliberations on projects under the Financial Infrastructure Transformation (FIT) program.
The UAE’s strategy to become a global financial center, which was launched in February 2023, includes nine initiatives, including the development and issuance of a CBDC called the digital dirham.
The Board of Directors of the Central Bank of the United Arab Emirates also reviewed the developments of the national Jaywan card system and the Aani instant payment platform.
The UAE Central Bank’s Board of Directors’ decision to regulate and license stablecoins comes eight months after news outlets reported on the listing of Distributed Technologies Research’s DRAM stablecoin.
It is a stablecoin backed by the dirham, on the decentralized exchanges Uniswap and PancakeSwap.
However, the original cannot be viewed in Hong Kong or the United Arab Emirates as of October 2023.
Stablecoins, whose value is tied to another asset — usually a fiat currency — continue to be a topic of debate among key stakeholders, especially in the context of policymaking.
In the United States, for example, House Representative Patrick McHenry has repeatedly called for asset regulation.
McHenry, who also chairs the House Financial Services Committee, is optimistic that Congress can pass legislation to regulate stablecoins before he retires at the end of the year.
