Key Takeaways:
The United Arab Emirates is experiencing significant stablecoin adoption in 2024. The total value of stablecoin transactions by centralized crypto exchanges and decentralized crypto exchanges exceeded $9.8 billion. This showcases a 55% surge compared to the H1 2023. The UAE crypto market is now dominated by Stablecoin surpassing traditional cryptocurrencies like Bitcoin and Ethereum.
The Central Bank of UAE is initiating for Payment Token Services Regulation to boost the stablecoin adoption further. The new regulations could take stablecoins to new heights capitalising on their impressive H1 2024 growth. The Token Services Regulation helps with the issuing, custody, and conversion of the tokens within the UAE. This would enhance the acceptance and usage of the stablecoin.
Retail transfers which are US $10K and below represent only 6% of the total value. The Institutional and professional transfers, which account for more than US $10 million and above account for 40$, 34%, and 20%. Retail transactions dominate the volume and the institutional and professional transfers accounted for the majority of the UAE stablecoin market. The centralised crypto exchanges dominate the stablecoin transfers surpassing the overall share in the crypto transactions.
These positive strides towards the crypto market can result in crypto adoption. The centralized crypto exchanges offer a regulated gateway for the users. Centralized crypto exchanges are gaining popularity for business payments and remittances. The decentralized crypto exchanges are focused mainly on trading. The most popular stablecoins are dollar-pegged. The most popular of them is Tether (USDT) and it has the largest market cap among other stablecoins on a global level. This is highly favorable within the UAE market as well. DAI is an algorithmic stablecoin that is ranked third in transaction volume after USDT and USDC.
The success of popular stablecoins highlights the significance of a user-friendly experience. Dirham-backed stablecoins like AE coins could revolutionize different sectors. The anticipated launch of Dirham-backed stablecoins can have a significant expansion from digital assets to eCommerce, real estate, and government services. This could further enhance the adaptability of stablecoins.
The UAE government has always been interested in innovation and the latest technology. The integration of digital banking and blockchain technology can have a significant impact on the thriving ecosystem. The Dubai International Finance Centre (DIFC) is the hub of the largest innovation within the region. The UAE is looking forward to the stablecoin regulations that will place it as the global leader within the crypto framework.
The clear rules and regulatory framework of the UAE can foster the crypto ecosystem ensuring that both investors and businesses are protected. Stablecoin and CBDC have the potential to reshape the economy of the UAE. The digital transformation could enhance financial inclusion and secure the digital economy.
UAE has a progressive regulatory approach led by VARA, ADGM, and DIFC. This will position UAS as a global leader in the blockchain and digital asset sector. The future of cryptocurrencies seems to be on a positive trajectory within the United Arab Emirates. This inclusive approach will enhance the growth of the crypto ecosystem. Investors are excited by the progressive, safe, and secure approach towards the crypto ecosystem.
