As the digital asset landscape continues to grow globally, the United Arab Emirates (UAE) has taken a major step forward by introducing its first regulated stablecoin, marking a significant milestone for the region’s financial technology sector. AED Stablecoin LLC has received approval from the Central Bank of the UAE (CBUAE) to launch AE Coin, a stablecoin pegged to the dirham.
This comes at a time when digital assets have gained tremendous traction in the UAE. According to a recent report by Chainalysis, the country saw a 42% growth in its digital asset sector in the year ending June 2024, making it the third-largest market in the Middle East, following Turkey and Saudi Arabia. The approval of AE Coin signifies the UAE’s increasing prominence as a hub for digital financial innovation.
Introducing AE Coin: A Stable Digital Currency
AE Coin, issued by AED Stablecoin LLC, is designed to offer a mix of traditional financial stability and the flexibility of blockchain technology. Backed by fully transparent and regularly audited fiat currency reserves, AE Coin will allow individuals and businesses to save, invest, and make daily transactions with ease.
“AE Coin will revolutionize the digital currency landscape, providing users with unparalleled financial freedom, stability, and top-tier security,” commented Ramez Rafeek, General Manager of AED Stablecoin.
The new stablecoin also holds great potential for businesses, offering low-cost, instant payments to suppliers and partners. Additionally, the company plans to venture into e-commerce payments, working with merchants and launching a mobile wallet app for users. In the near future, AE Coin will also integrate with decentralized finance (DeFi) platforms, enabling users to lend, borrow, and earn interest without the need for intermediaries.
The UAE has rapidly emerged as a leader in the DeFi space, second only to Israel in terms of DeFi activity, according to the Chainalysis report. AE Coin’s integration with these platforms will further cement the UAE’s role in the digital asset ecosystem.
Competition on the Horizon
While AED Stablecoin LLC has the advantage of being the first regulated stablecoin issuer in the UAE, it may soon face competition. Tether, the global leader in stablecoins, is reportedly seeking regulatory approval to launch its own dirham-pegged stablecoin in the UAE.
Bahrain Introduces BTC Product with Downside Protection
In neighboring Bahrain, digital assets are also gaining traction. The National Bank of Bahrain (NBB), in collaboration with ARP Digital, has launched a BTC-linked product that guarantees protection against Bitcoin’s volatile price drops. The product is aimed at institutional investors and promises access to Bitcoin’s price gains while safeguarding investors from potential downturns.
“This structured investment opens new horizons for investors looking to adopt a measured approach to digital assets,” said Abdullah Kanoo, co-founder of ARP Digital.
The product is designed for risk-averse investors and is expected to appeal to those seeking a balance between exposure to Bitcoin and protection from market fluctuations.
With both the UAE and Bahrain making strides in the digital finance sector, the Middle East is quickly becoming a key player in the global digital asset market.
