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The Central Bank of the UAE introduced the Payment Token Services Regulation as Circular No 2 of 2024, which took effect on 31 August 2024 and established licensing requirements for all activities involving payment tokens used in domestic transactions. Under this framework any stablecoin deployed for payments inside the country must be issued by an entity that holds a full licence and remains subject to ongoing regulatory oversight. According to S&P Global Ratings the rules were structured to bridge traditional banking infrastructure with digital asset ecosystems while enforcing consumer safeguards across the board. The regulation explicitly covers issuance, conversion, custody and transfer functions and prohibits unlicensed entities from offering any of these services within the UAE or to its residents.
Operational requirements detailed in the PTSR mandate complete segregation of reserve assets from the issuer’s proprietary funds together with monthly audits performed by independent external parties. Issuers face a minimum initial capital threshold of 15 million dirhams supplemented by additional reserves calibrated to the volume of tokens in circulation. The Central Bank of the UAE also bars the issuance of algorithmic stablecoins entirely and forbids any form of interest or time-based return linked to token holdings. Gulf News noted on 21 January 2026 that these measures aim to embed dirham-backed digital tokens within the regulated financial architecture.
By June 2026 the PTSR had enabled approvals for several dirham-referenced stablecoins including those from RAKBANK, AE Coin, Zand AED and the International Holding Company-led DDSC project. Chambers and Partners’ Blockchain and Crypto-Assets 2026 guide recorded that USDU secured registration as the first foreign payment token while the Abu Dhabi Global Market separately licensed Paxos Issuance MENA and Universal Digital to issue USD-backed tokens under its Fiat-Referenced Tokens framework. The Central Bank of the UAE’s rulebook states that no person may perform payment token services without the appropriate licence or registration.
A Pinsent Masons analysis published in August 2025 indicated that the conclusion of the PTSR transition period had strengthened enforcement of compliance standards for digital payment instruments. The regulation further prohibits promotion or marketing of payment tokens by any unlicensed party whether directed at UAE residents or conducted from within the country. Financier Worldwide Magazine reported that the PTSR defines payment token services to encompass issuing, custody with transfer, and conversion activities that mirror functions traditionally handled by banks or foreign-exchange providers.
Regulation Tomorrow documented that the Central Bank of the UAE issued the PTSR in July 2024 to create a comprehensive supervisory structure for stablecoin-related services across the federation. The dual approach separating onshore dirham token licensing from ADGM’s USD-focused regime allows authorities to address both local currency requirements and international use cases within distinct perimeters. Gulf News stated that the framework had already begun to reshape everyday payments and banking relationships by formalising the role of regulated stablecoins.
