S&P Indicates Lower Banking Revenue in UAE Thanks to Stablecoins #

The UAE’s banking and payments landscape is undergoing a major shift as stablecoin regulation reshapes how individuals and businesses conduct everyday transactions. According to S&P, the adoption of blockchain-based settlement could slightly reduce banks’ traditional payment and transfer revenues, as stablecoins lower fees and increase efficiency. However, potential revenue pressure may be offset by new income streams, including digital asset wallet services and reserve holding for third-party stablecoin issuers. Importantly, S&P does not expect these changes to materially affect the credit stability of UAE banks, given the strength of the regulatory framework.

Regionally, the UAE has positioned itself as a leader in stablecoin regulation, adopting rules that align with global best practices. Stablecoins must be fully reserve-backed, segregated from operational funds, issued under proper licensing, and subject to robust supervision. These safeguards are enabling the rollout of regulated digital dirhams for everyday use, supporting a secure, efficient payment ecosystem and accelerating the integration of digital currencies into the broader UAE economy.