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CBUAE Payment Token Services Regulation (Circular No. 2/2024, effective 31 August 2024)
Contents
Document text
1. Scope, service categories and prohibitions
The Regulation applies to persons providing payment token services in the UAE. Core licence categories include Dirham payment-token issuers, payment-token custodians and transferors, and payment-token conversion providers; foreign payment-token issuers not incorporated and located in the UAE may apply for registration. Payment Token Services comprise digital payment activities including issuance, conversion, custody and transfer.
The Regulation prohibits issuance, promotion or provision of services relating to algorithmic stablecoins, privacy tokens and other unauthorised means of payment in the UAE, and restricts the provision or promotion of foreign payment tokens to persons in the UAE. Dirham payment tokens must be denominated only in Dirham, while foreign payment tokens must be denominated only in a foreign currency.
2. Licensing conditions, capital and reserves
Applicants must meet legal-form, initial and ongoing capital, shareholder and management, risk, technology and application-document requirements. A Dirham payment-token issuer must maintain at least AED 15 million in base capital plus additional capital scaled to the face value of outstanding payment tokens; custody and transfer or conversion providers must meet capital requirements based on transaction volume.
A payment-token issuer must hold reserve assets covering at least the total fiat face value of outstanding payment tokens through a segregated account or qualifying arrangement and may use them only for permitted purposes. Reserve assets must be segregated from own assets, reconciled and reported to the Central Bank at least daily, and subject to at least monthly independent external audit. Tokenholders have a right to redeem at par.
3. Customer protection, white papers and ongoing operation
The Regulation requires disclosure of payment-token, reserve, redemption, fee and risk information, and submission of a white paper and audit report to the Central Bank before sale or transfer. Customer agreements must state redemption conditions and fees. Payment-token custodians and transferors must keep customer payment tokens in a separate wallet from other virtual assets and maintain records, internal controls, complaints and asset-protection arrangements.
Licensees and registrees must also comply with corporate-governance, risk-management, agent, outsourcing, information-technology, cybersecurity, business-continuity and ongoing-reporting requirements. Violations of the Regulation or Central Bank Law may attract administrative and financial sanctions deemed appropriate by the Central Bank.
4. AML/CFT, Annex documents and transition
Licensees and registrees must apply AML/CFT and proliferation-financing controls and comply with consumer-protection, data-protection and ongoing-supervision obligations. The Annex lists licence-application documents including the application form, certified paid-up-capital report, ownership structure, controller information, management structure, independent assessments, source-of-funds evidence, cybersecurity policy, risk management, AML/CFT, reserve management, investment policy, customer agreements, three-year business plan, exit plan, board resolution, constitutional documents and audited financial material.
The Regulation took effect on 31 August 2024 and provides a one-year transition period, which the Central Bank may extend and may use to order cessation of non-compliant services. Transition and application arrangements remain subject to the latest CBUAE Rulebook and formal notices.
Because CBUAE website terms do not authorise commercial full-text republication, this page presents independently compiled key points, not the official full text or a complete translation. Please consult the official Rulebook for the complete Regulation, Annex and later amendments.
Because the source’s reuse terms do not authorise commercial full-text republication, this page presents key points independently compiled by Man Kun. It is not the official full text or a complete translation. Please consult the official source for the complete document and its annexes.
Key cautions
- CBUAE website terms permit copying only for personal, internal-organisation or non-commercial use with attribution; authorisation for commercial full-text republication has not been established, so this page presents independently compiled key points.
- The Regulation prohibits algorithmic stablecoins and privacy tokens and places strict limits on the use or promotion of foreign payment tokens in the UAE.
- Reserve assets, redemption at par, customer-asset segregation, white papers and AML/CFT are continuing obligations after licensing; the Annex application list is only one part of the licensing process.