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Disclaimer: This story was originally published on June 4, 2024.

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The Central Bank of the United Arab Emirates (CBUAE) has officially decided to oversee and issue licenses for the stablecoin market in an effort to make the Arab country a global financial center.

According to the Emirates News Agency (WAM), the CBUAE board of directors, headed by UAE Vice President and Chairman Sheikh Mansour bin Zayed Al Nahyan, approved the issuance of a regulation for licensing and overseeing stablecoins. The board also approved a series of policies aimed at supporting the banking and insurance sectors and services related to financial infrastructure.

The central bank’s discussions on stablecoins are part of its broader Financial Infrastructure Transformation (FIT) program, a nine-initiative strategy launched in February 2023 to position the UAE as a global financial hub. One key initiative under the FIT program is the development and issuance of the digital dirham, the UAE's central bank digital currency (CBDC).

The board of the central bank also discussed updates on the Jaywan national card scheme and the instant payments platform “Aani.”

In October 2023, former SoftBank executive Akshay Naheta announced the launch of his Abu Dhabi-based company Distributed Technologies Research. The firm focuses on stablecoin technologies. At the time, multiple reports showed that DTR’s UAE dirham-backed stablecoin, DRAM, was also listed on several decentralized exchanges (DEXs), including Uniswap and PancakeSwap.

DRAM is an Ethereum ERC-20 token issued by the Hong Kong-based Dram Trust. An independent trustee, licensed and regulated by the Hong Kong Monetary Authority, oversees the approval of token mints and burns.

However, DTR reportedly cannot offer its dirham-pegged stablecoin in Hong Kong or the United Arab Emirates. Nevertheless, the company is already in discussions with relevant entities to facilitate token liquidity and list the stablecoin on centralized exchanges outside these jurisdictions.

Earlier this year, the UAE conducted its first cross-border digital dirham transfer using the mBridge CBDC platform, sending 50 million dirhams ($13.6 million) to China.