users in the UAE. The law is expected to make stablecoins a more mainstream option for both payments and decentralised finance (DeFi). According to crypto analytics platform CoinGecko, the current stablecoin market is worth over $260 billion (Dh954 billion). Under the new legislation, this could expand to $2 trillion (Dh7.3 trillion) by 2028. Experts told KT LUXE that this growth marks a shift from the early days of speculative activity in the crypto space to a more mature, regulated financial landscape. UAE Takes the Lead with AED-Backed Stablecoin The UAE has taken proactive steps by introducing regulations for AED-backed stablecoins. Meera Judge, Director of Regulatory Licensing and Policy at Binance, highlighted how strong regulations create a sense of security and open the door to innovation. “When people feel secure, they are more likely to participate. Clear guidelines lead to real adoption,” said Judge. She emphasized that transparency and consumer protection are vital to boosting public confidence in digital assets. Regulations act as safeguards, allowing users to consider crypto as a legitimate option for financial diversification. In December 2024, AE Coin received its final approval from the Central Bank of the UAE (CBUAE) under its digital payment token services framework. The coin promises instant, secure, low-cost, and efficient payments. Judge remarked: “The launch of an AED-backed stablecoin is a major step forward. It shows the UAE’s serious commitment to decentralized finance and global financial innovation. This isn't just another stablecoin — it’s a bold move toward building a regulated crypto ecosystem that’s globally competitive.” Local Currency, Global Vision Stablecoins are designed to maintain a fixed value. The UAE’s initiative to introduce a local currency-backed token reflects its intent to reduce reliance on USD-based stablecoins and strengthen regional financial sovereignty. “Local fiat stablecoins like AE Coin demonstrate the maturity of national crypto regulation,” said Judge. “They support regional needs, promote financial inclusion, and make crypto more relevant beyond dollar-centric systems.” Global Perspective Gracy Chen, CEO of Bitget, echoed this optimism. She noted that the UAE’s AED stablecoin regulations — which took effect in June 2025 — prioritize stability and centralized oversight by the CBUAE. In contrast, the US Genius Act establishes a dual federal-state oversight for USD stablecoins. “While both regulatory approaches aim to build trust and encourage adoption, the UAE’s focus is on regional autonomy and financial independence,” Chen said. She added that non-USD stablecoins such as AED-backed tokens are key to supporting regional trade, reducing USD dependence, and improving access for local markets. Chen also highlighted potential challenges and shifts in the market: “Bank-issued stablecoins in both the US and UAE will offer quicker, cheaper transactions and greater liquidity. However, they might also compete with existing tokens like USDT (Tether) and increase regulatory costs for crypto exchanges.” “This could lead to market consolidation, possibly hindering innovation and subjecting exchanges to tighter scrutiny,” she added. Institutional Support Growing The involvement of major financial institutions — including JPMorgan, Bank of America, Citigroup, and Wells Fargo in the US, and FAB, MBank, and Zand Bank in the UAE — is further validating the crypto space. Their entry is expected to enhance legitimacy, drive adoption, and increase trading volumes on exchanges.