Stablecoins USDC and EURC have been officially recognised as crypto tokens in Dubai. On February 24, Circle, the issuer of these stablecoins, announced that the Dubai Financial Services Authority (DFSA) has approved USDC and EURC for use within the Dubai International Financial Centre (DIFC). This approval allows firms operating in the DIFC to integrate these tokens into their daily economic activities. According to Circle, USDC and EURC are the first stablecoins to receive official recognition from the DFSA.
Established in 2004, the Dubai Financial Services Authority (DFSA) is an independent regulatory body overseeing the Dubai International Financial Centre (DIFC). In 2022, the DFSA introduced a comprehensive crypto token framework to provide businesses operating within the DIFC with clear guidelines on safely engaging with crypto tokens. Only DFSA-recognised crypto tokens are permitted to be used by firms located within the DIFC region to ensure firms are protected against financial risks and losses.
Here’s What this Approval Means for USDC, EURC Stablecoins
The DIFC claims to include over 6,900 companies. With the DFSA-approval, the USDC and EURC stablecoins can be used by these companies for digital asset services, payments, and treasury management.
Holders of these stablecoins can seamlessly convert between fiat and crypto, while also leveraging the tokens for fast cross-border settlements. This enables them to bypass service fees typically charged by money transfer platforms.
Dante Disparte, Chief Strategy Officer and Head of Global Policy and Operations at Circle called the development a ‘milestone’ moment for the stablecoin sector.
“This milestone aligns with our mission to make digital dollars and euros more accessible, interoperable, and useful for businesses, developers, and financial institutions worldwide,” Dante said. “As the first stablecoins to receive this designation, USDC and EURC continue to set the global standard for transparency, compliance, and utility.”
Bitcoin, Ethereum, Litecoin, Toncoin, and Ripple have reportedly been recognised by the Dubai Financial Services Authority (DFSA) for use by businesses operating within the Dubai International Financial Centre (DIFC). With the recent approval of USDC and EURC, these two stablecoins have now joined the list of DFSA-recognised crypto tokens.
The Stablecoin Ecosystem
Stablecoins are cryptocurrencies whose value is backed by traditional assets such as fiat currencies or commodities like gold. This backing helps stabilise their prices, making them less susceptible to market volatility. Typically, stablecoins maintain a 1:1 value ratio with their underlying asset. For example, each USDC token is pegged at $1 (roughly Rs. 86), while each EURC token is valued at €1 (roughly Rs. 90).
In the global stablecoin ecosystem, Circle is touted as the second largest player after Tether. In January, the company reported that USDC’s all-time volume touched the mark of $18 trillion (roughly Rs. 15,55,21,000 crore) since its launch in September 2018.
Crypto exchange Binance and electronics giant Sony are among entities that are working with Circle to integrate stablecoin-related features into their respective Web3 offerings.
