Dubai continues to strengthen its role in the global cryptocurrency market through regulatory measures and the implementation of new financial solutions.
New Opportunities for USDC and EURC in Dubai
The largest stablecoin network, Circle, has received official authorization from the Dubai Financial Services Authority (DFSA), allowing the identification and operation of USDC and EURC tokens in Dubai International Financial Centre (DIFC). This is the first approval under the crypto token framework of DIFC, enabling financial and fintech companies to legally integrate USDC and EURC for payments and treasury management.
Stringent Requirements for Stablecoin Issuers
The Central Bank of UAE actively works on shaping the country's crypto ecosystem. On October 14, 2024, it granted in-principle approval for the AED stablecoin, the first fully regulated dirham-pegged stablecoin. Issuers must ensure that about 50% of their reserve assets are in cash with the remainder invested in safe instruments like UAE government bonds.
VARA's Position and Market Competition Pressure
Dubai’s Virtual Assets Regulatory Authority (VARA) continues to shape the crypto space of the region with enforcement actions and regulatory directives. Recently, VARA imposed fines ranging from 50,000 to 100,000 AED on firms operating without required licenses or breaching market regulations. The acceptance of USDC and EURC in Dubai boosts competition in the stablecoin market, especially against USDT of Tether.
The strategy of cautious oversight and the implementation of new financial solutions fortify Dubai's position as one of the global leaders in virtual asset space and contribute to the further spread of stablecoins.
