25-2-2025 – Circle has secured unprecedented authorisation from the Dubai Financial Services Authority (DFSA) to operate its USDC and EURC stablecoins within the Dubai International Financial Centre (DIFC). This pioneering approval, announced on Monday, represents the inaugural authorisation under DIFC’s cryptocurrency token framework, heralding a new chapter in the UAE’s digital currency adoption.
The regulatory milestone empowers financial institutions and fintech enterprises within the DIFC to legally incorporate USDC and EURC into their service offerings, spanning payments, treasury management, and broader financial services. This integration is poised to revolutionise regional digital finance solutions whilst bolstering Dubai’s position as a global cryptocurrency hub.
The development intensifies competition in the stablecoin market, particularly against Tether’s USDT, which has been making significant strides in the region. Tether’s recent collaboration with Phoenix Group and Green Acorn Investments to launch a dirham-pegged stablecoin underscores the growing strategic importance of the UAE market.
Amidst evolving global regulatory landscapes, the UAE has emerged as a beacon of progressive digital asset regulation. The Central Bank of the UAE (CBUAE) has been instrumental in shaping the nation’s cryptocurrency framework, notably granting in-principle approval for AED Stablecoin – the country’s first fully regulated dirham-pegged stablecoin under its Payment Token Service Regulation framework.
The regulatory framework imposes robust requirements on stablecoin issuers, mandating that 50% of reserve assets be held in cash, with the remainder invested in secure instruments such as UAE government bonds. The framework explicitly prohibits algorithmic stablecoins and privacy tokens, establishing a clear regulatory perimeter.
Recent market data reveals significant shifts in stablecoin liquidity across major blockchain networks. Tron (TRX) has emerged as a frontrunner, recording an $824.51 million increase in Tether and USD Coin holdings. The total stablecoin market capitalisation has reached $226.515 billion, with USDT commanding a 63% market share.
Dubai’s Virtual Assets Regulatory Authority (VARA) continues to maintain regulatory oversight through enforcement actions, including fines ranging from $13,600 to $27,200 for non-compliant operators. This regulatory vigilance, coupled with Circle’s broader compliance strategy – which encompasses adherence to the European Union’s Markets in Crypto-Assets (MiCA) regulations and Canada’s stablecoin framework – positions Dubai as a pivotal hub in the global digital asset landscape.
