In a landmark move for the digital finance sector, the Dubai Financial Services Authority (DFSA) has officially approved the use of USDC and EURC stablecoins, issued by Circle. This decision marks the first time stablecoins have been fully recognized in Dubai’s special economic trade zone, paving the way for wider adoption in the region.
According to a press release, the Dubai International Financial Centre (DIFC) has granted full approval to USDC and EURC, reinforcing its position as a global hub for financial innovation. The DIFC operates as an economic-free zone, housing hundreds of financial institutions with an independent legal and tax framework distinct from the rest of Dubai.
With this approval, financial institutions within the DIFC can integrate USDC and EURC into their services. Under DIFC regulations, only digital assets recognized by the DFSA can be utilized for financial offerings in Dubai.
“This milestone aligns with our mission to make digital dollars and euros more accessible, interoperable, and useful for businesses, developers, and financial institutions worldwide,” stated Dante Disparte, Circle’s Head of Global Policy.
The approval has sparked discussions about various stablecoin use cases, with DIFC-based institutions exploring applications in treasury management and cross-border payments. Circle’s approval follows an extensive regulatory engagement process, which included the establishment of a local entity to ensure compliance with DIFC regulations. The company has also maintained liquid reserves on a 1:1 basis while implementing a transparent redemption mechanism.
“The DFSA’s approval of USDC and EURC as recognized crypto tokens within the DIFC is yet another validation of our constructive approach to regulatory and policy engagement,” added Disparte. This recognition follows Circle’s recent compliance with the European Union’s Markets in Crypto-Assets (MiCA) regulations in 2024.
Driving Innovation in the DIFC
The DFSA’s move to approve Circle’s stablecoins is part of a broader strategy to elevate the DIFC’s standing in the global financial landscape. In 2024, the DIFC revamped its legal framework, granting property rights on digital assets and refining Web3 terminology to align with international standards.
Further regulatory advancements include lifting the prohibition on digital asset-based funding activities and reducing fees for token recognition, signaling a progressive stance toward financial technology.
AFS and Ternoa Collaborate on Stablecoin-Based PoS Terminals
Meanwhile, Arab Financial Services (AFS) has forged a partnership with PayFi network provider Ternoa to introduce stablecoin-based Point-of-Sale (PoS) terminals across the Gulf region. The initiative is set to revolutionize digital payments by enabling merchants and consumers to conduct transactions using stablecoins.
The collaboration will leverage Athar’s consumer-facing finance protocol as the underlying infrastructure. The pilot phase will commence in the United Arab Emirates (UAE) before expanding to other Gulf Cooperation Council (GCC) nations.
“By integrating stablecoins and decentralized finance, we are unlocking new possibilities for merchants and consumers across the UAE, paving the way for the broader adoption of digital payments in the region,” stated AFS CEO Samer Soliman.
Stablecoin-based PoS terminals are expected to offer multiple advantages, including faster transactions and reduced fees compared to traditional banking systems. Experts believe these innovations could significantly enhance financial inclusion and streamline retail payments in the region.
Ternoa CEO Mickael Canu emphasized the security and global accessibility of the system, stating, “The next big step for blockchain and digital finance is making it useful in everyday life.”
UAE at the Forefront of Digital Transformation
The UAE continues to lead digitization efforts in the Gulf, backed by robust government initiatives and private-sector investments. Industry experts attribute the nation’s rapid technological progress to a strategic push to diversify its economy beyond oil dependence.
As part of its commitment to digital innovation, the UAE has launched a comprehensive digitization strategy, supporting advancements in artificial intelligence (AI) and Web3 technologies. Eased licensing regulations have also attracted global technology firms, further cementing the country’s role as a hub for digital finance and blockchain development.
With stablecoins gaining official recognition and groundbreaking partnerships like AFS and Ternoa shaping the payment landscape, Dubai is poised to become a trailblazer in the evolving world of digital finance.
