UAE Approves First Dirham-Backed Stablecoin, Boosting Crypto Market Growth

The UAE has officially approved its first stablecoin backed by the UAE Dirham, marking a pivotal moment in the nation’s cryptocurrency landscape.

This approval signals a shift toward more robust regulation of digital assets and strengthens the country’s efforts to create a secure and stable cryptocurrency market.

The newly approved AED-pegged stablecoin, AE Coin, is designed to maintain a 1:1 ratio with the UAE Dirham, ensuring stability in its value. With blockchain technology at its core, AE Coin promises to deliver faster, more efficient transactions, providing a modern alternative to traditional banking systems.

According to Ramez Rafeek, the General Manager of AE Coin, the stablecoin will offer instant, cost-effective transfers while setting new standards for trust and security in the digital currency sector.

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This move reflects a broader trend in the UAE’s growing stablecoin market, which is projected to reach $9.8 billion by early 2024. This represents a 55% increase from the previous year, highlighting the expanding role of stablecoins in the crypto economy.

As stablecoins now account for more than half of all crypto transactions, their growing adoption indicates increasing confidence in the regulatory framework the UAE has built around digital assets. While smaller transactions dominate in number, large institutional trades make up the majority of the total value being transacted, a trend that the introduction of the AED-backed stablecoin is likely to strengthen.

The UAE is also seeing other major players, such as Tether, planning to launch their own AED-backed stablecoins in the near future. This growing ecosystem will likely help position the UAE as a leading center for digital currencies. With clear regulations in place, these new developments will contribute to more secure, efficient, and innovative financial solutions in the region, reshaping industries like online shopping, cross-border money transfers, and decentralized finance.

Alexander Stefanov