Central Bank of the United Arab Emirates (CBUAE)

Overview

The Central Bank of the United Arab Emirates (CBUAE) is the UAE's central bank and primary financial regulator, responsible for maintaining monetary stability, ensuring the safety and soundness of the financial system, and overseeing all licensed financial institutions and payment service providers operating in the UAE. Established under Federal Decree-Law No. 14 of 2018 (comprehensively amended by Federal Decree-Law No. 6 of 2025), the CBUAE exercises binding regulatory authority over banking, insurance, payment services, stored value facilities, hawala providers, and digital asset infrastructure.

The Central Bank operates as the state institution with exclusive authority to:

• Issue and manage the UAE national currency (Arab Emirates Dirham)
• Formulate and implement monetary and credit policy
• Develop and supervise the banking and financial system
• Act as banker to the UAE Government
• Manage the country's foreign exchange reserves and gold holdings
• Regulate payment systems, remittance services, and fintech providers
• Oversee the emerging digital currency ecosystem

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Stored Value Facilities

Regulatory Framework

The Stored Value Facilities (SVF) Regulation (updated October 2020, effective November 2020) establishes comprehensive licensing and supervision requirements for entities issuing, managing, or operating stored value products in the UAE.

Scope of Regulation

The SVF Regulation applies to:

• Electronic payment systems and pre-loaded payment products
• Multi-purpose stored value cards and digital wallets
• Single-currency and multi-currency value storage
• Cross-border SVF offerings into the UAE
• Crypto-asset and virtual asset integration with SVF

Exclusions:

• Single-purpose SVF (e.g., gift cards for specific retailers)
• Certain cash reward schemes
• Bonus points programs
• Digital product purchase vouchers
• SVF with float below AED 500,000 and fewer than 100 customers

Licensing Requirements

• Mandatory License: SVF issuance/operation requires prior Central Bank approval (except single-purpose exemptions)
• Capital Requirements: Licensees must maintain minimum capital reserves relative to float size and customer base
• Technology Standards: SVF operators must meet prescribed security, interoperability, and data protection standards
• Consumer Protections: Mandatory consumer disclosure, complaints handling, and dispute resolution procedures
• Float Management: Specific rules govern segregation and management of customer funds (float)

Enhanced Fintech Provisions

The updated SVF Regulation incorporates:

• Integration of crypto-asset and virtual asset services within SVF framework
• Ability for SVF providers to operate without mandatory bank partnerships
• Cross-border offering capabilities with prescribed safeguards
• Sandbox provisions for testing of innovative SVF structures

Hawala and Remittance Regulation

Regulatory Authority and Scope

The CBUAE exercises binding regulatory authority over all hawala providers and alternative remittance system operators in the UAE under the Registered Hawala Providers Regulation. Hawala activity is prohibited unless the provider is registered with and licensed by the Central Bank.

Registration and Licensing Framework

• Mandatory Registration: All hawala operators must register with CBUAE prior to commencement of business
• License Requirement: Hawala services cannot be offered without active CBUAE license
• Unlicensed Activity: Operating hawala services without license is a criminal offense subject to imprisonment and substantial fines
• Regulatory Status: Hawala providers are classified as "Registered Hawala Providers" (RHP) under CBUAE oversight

Anti-Money Laundering and Combatting Terrorist Financing (AML/CFT)

The CBUAE established the Anti-Money Laundering and Combatting the Financing of Terrorism Supervision Department (AMLD) to ensure Registered Hawala Providers maintain robust AML/CFT compliance.

Key Requirements:

• Comprehensive AML/CFT compliance programs designed to prevent misuse for money laundering and terrorist financing
• Customer due diligence (CDD) and Know Your Customer (KYC) procedures aligned with international standards
• Transaction monitoring and suspicious activity reporting obligations
• Record retention and documentation requirements
• Staff training and awareness programs
• Compliance officer designation and governance structures

Supervisory Approach:

• Risk-based, data-driven supervision methodology
• Hybrid approach combining periodic onsite examinations with continuous offsite monitoring
• Remediation requirements and enforcement action for non-compliance

Hawala-to-Bank Relationships

Licensed financial institutions accepting funds from Registered Hawala Providers must:

• Conduct due diligence on hawala provider counterparties
• Verify AML/CFT compliance status
• Monitor transactions for suspicious patterns
• Maintain records of hawala provider relationships
• Comply with guidance issued by CBUAE on correspondent banking relationships

Remittance Service Standards

In addition to hawala-specific oversight, the CBUAE regulates all remittance service providers as payment service providers under the RPSCS framework, with requirements covering:

• Cross-border fund transfer compliance
• Exchange rate transparency and disclosure
• Fee structures and pricing communication
• Settlement and liquidity management
• Destination market coordination and compliance

Supervisory Authority

The CBUAE exercises comprehensive prudential and market conduct supervision over all UAE-licensed banks, including:

• State-owned and privately-owned commercial banks
• Islamic banks (Sharia-compliant banking)
• Investment banks and merchant banks
• Foreign bank branches operating in the UAE

Capital and Liquidity Standards

All licensed banks must maintain minimum regulatory capital and liquidity ratios prescribed by CBUAE:

Current Regulatory Thresholds:

• Capital Adequacy Ratio (CAR): Minimum 13% (Basel III/IV aligned)
• Liquidity Coverage Ratio (LCR): Minimum requirement exceeding 100% (current system average: 146.6%)
• Net Stable Funding Ratio (NSFR): Compliance with prescribed thresholds
• Leverage Ratio: Minimum 3% (non-risk-weighted measure)

As of 2026, the UAE banking system maintains:

• Aggregate Capital Adequacy Ratio: 17% (healthy buffer above minimum)
• Total Banking System Assets: Exceeding AED 5.42 trillion
• Liquidity position: Strong across system

Macroprudential Oversight

The CBUAE employs macroprudential tools to manage systemic financial stability risks:

• Countercyclical capital buffer requirements
• Sectoral concentration limits
• Loan-to-value (LTV) ratio constraints
• Debt service ratio (DSR) thresholds for consumer lending
• Large exposure limits

Consumer Protection in Banking

Banks must comply with the Consumer Protection Regulation (CPR) and Consumer Protection Standards, including:

• Transparent disclosure of products, fees, and risks
• Fair lending practices and responsible credit assessment
• Data protection and breach notification requirements
• Complaints handling and dispute resolution procedures
• Financial literacy and public awareness initiatives

Regulatory Framework

The CBUAE issued the Consumer Protection Regulation (Circular No. 8/2020) on 31 December 2020, establishing comprehensive protections for consumers (natural persons and sole proprietorships) in their dealings with licensed financial institutions.

Core Consumer Protection Standards

Conduct and Governance:

• Fair, transparent, and responsible business conduct
• Conflicts of interest management and disclosure
• Senior management accountability for consumer protection outcomes
• Consumer protection function establishment with adequate resourcing

Responsible Lending Practices:

• Rigorous creditworthiness and affordability assessment
• Fair terms and conditions aligned with consumer capacity
• Affordability stress-testing (Debt Service Ratio limits)
• Prevention of predatory lending practices

Information and Transparency:

• Clear disclosure of product features, fees, and risks
• Plain language documentation standards
• Pre-contractual information provision
• Real-time transaction confirmations and statements

Access to Services:

• Removal of barriers to financial service access
• Fair pricing and non-discriminatory terms
• Account access for vulnerable populations
• Digital accessibility for online services

Complaints and Dispute Resolution:

• Accessible complaints procedures
• Timely investigation and response requirements
• Remediation and compensation authority
• Appeals mechanisms with external review options

Data Protection Requirements

Licensed institutions must:

• Establish dedicated data protection departments
• Allocate specialized staff for data protection compliance
• Implement privacy by design principles
• Conduct data protection impact assessments for new services
• Maintain data security controls aligned with international standards
• Report significant data breaches to CBUAE and affected consumers
• Manage third-party data processor relationships

Consumer Awareness Initiatives

The CBUAE promotes:

• Financial literacy programs and public education
• Transparency in industry practices and standards
• Dispute resolution mechanism awareness
• Protection of vulnerable consumer populations
• Cybersecurity and fraud awareness campaigns

Regulatory Powers

Expanded Enforcement Framework

Federal Decree-Law No. 6 of 2025 substantially expanded the CBUAE's enforcement powers and penalties, signaling a shift toward stronger deterrence and heightened regulatory enforcement.

Administrative Monetary Penalties

Licensed Financial Institutions:

• Maximum administrative fine: AED 1,000,000,000 (AED 1 billion)
• Previous maximum (2018 Law): AED 200 million
• Inflation rate: 400% increase reflecting enhanced enforcement capacity

Financial Market Infrastructure Operators:

• Maximum fine: AED 20,000,000

Authorized Individuals (officers, directors, compliance staff):

• Maximum fine: AED 5,000,000
• Previous maximum (2018 Law): AED 2 million

Criminal Offenses

Unlicensed Financial Activities:

• Unlicensed provision of licensed financial services: Imprisonment and/or fine between AED 50,000 and AED 500,000,000
• Operating hawala without registration: Criminal penalties (imprisonment and substantial fines)
• Operating SVF without license (except single-purpose exemptions): Criminal liability

Other Criminal Violations:

• Fraud, misrepresentation, and false statements to CBUAE
• Obstruction of regulatory examinations or audits
• Violation of customer fund segregation requirements
• Unauthorized use of regulatory designations or false compliance claims

Range of Administrative Actions

In addition to monetary penalties, the CBUAE may:

• Issue Directives requiring remediation of violations within specified timeframes
• Restrict Operations limiting business activities pending compliance
• Suspend Licenses temporarily halting service provision
• Revoke Licenses terminating regulatory authorization permanently
• Appoint Administrators to assume control of institution management
• Require Capital Injections to address capital deficiencies
• Impose Conditions restricting business scope or requiring enhanced monitoring
• Public Censure issuing public statements regarding violations
• Rescind Authorizations withdrawing authorization for specific authorized individuals

Enforcement Operations

The CBUAE Enforcement Department operates under a disciplined twofold approach:

1. Protection: Safeguarding the financial system, consumers, and market integrity
2. Deterrence: Creating credible consequence mechanisms that discourage non-compliance

Enforcement Priorities:

• Unlicensed financial activity and regulatory arbitrage
• Consumer fraud and market manipulation
• Anti-money laundering and sanctions violations
• Data protection and cybersecurity breaches
• Governance failures and risk management deficiencies
• Systemic risk creation and excessive leverage

Regulatory Role and Function

Legal Foundation

Primary Legislative Framework

The CBUAE derives its regulatory authority from Federal Decree-Law No. 14 of 2018 Concerning the Central Bank and the Regulation of Financial Institutions and Activities, which was substantially expanded and superseded by Federal Decree-Law No. 6 of 2025 Regarding the Central Bank, Regulation of Financial Institutions and Activities, and Insurance Business.

Key Amendments and Updates:

• Federal Decree-Law No. 23 of 2022: Amended provisions related to digital currency and fintech activities
• Federal Decree-Law No. 54 of 2023: Enhanced provisions for emerging financial activities
• Federal Decree-Law No. 6 of 2025: Comprehensive overhaul consolidating banking, insurance, and payment regulation under unified framework

Governance Structure

The Central Bank is managed by a Board of Directors comprising seven (7) members:

• Chairman (appointed by UAE President)
• Deputy Chairman
• Governor (Chief Executive Officer)
• Four additional Board Members

Current Leadership:

• Governor: H.E. Khaled Mohamed Balama (as of March 2026)
• Assistant Governor, Monetary Policy & Financial Stability: Ebrahim Al-Zaabi
• Assistant Governor, Financial Crime, Market Conduct & Consumer Protection: Fatma Al Jabri
• Assistant Governor, Executive Office & Secretary General of the Board: [UNVERIFIED - Senior official with 30+ years CBUAE experience]

Legal Authority Status

The CBUAE's regulatory determinations are binding on all licensed financial institutions, payment service providers, and other regulated entities within UAE jurisdiction. The Central Bank's rulebook, regulations, circulars, and guidance documents constitute enforceable regulatory requirements with the force of law.

Licensing and Authorization Relevance

Regulatory Framework for Digital Assets

Federal Decree-Law No. 6 of 2025 establishes a comprehensive regulatory framework for virtual asset payment services, digital currencies, and fintech infrastructure:

Payment Services Using Virtual Assets are expressly licensable categories, subject to CBUAE oversight. Any operations involving creation, transfer, storage, or use of digital assets as payment means require CBUAE authorization.

Regulatory Scope Limitation: CBUAE authority over virtual assets is strictly limited to those used as payment instruments (stablecoins, digital dirham). Virtual assets classified as:

• Investment instruments, or
• Utility tokens

...fall under the authority of the Capital Markets Authority (CMA) or other relevant regulators.

Digital Dirham (CBDC)

Federal Decree-Law No. 6 of 2025 formally establishes the Digital Dirham as legal tender and a lawful means of payment equivalent to physical currency:

• Status: CBDC issued and controlled by CBUAE
• Legal Tender: Full legal tender status on par with physical AED currency
• Settlement Finality: Central bank payment finality
• Use Cases: Wholesale and retail payment mechanisms [UNVERIFIED - retail rollout timeline TBD]
• Technology: Central bank distributed ledger infrastructure

Stablecoin Regulation

The CBUAE regulates dirham-backed stablecoins under payment services licensing framework:

Notable Initiative: AE Coin project announced April 2025:

• First fully regulated UAE dirham-backed stablecoin
• Joint initiative: International Holding Company (IHC), ADQ, First Abu Dhabi Bank (FAB)
• Designed for regulated digital asset ecosystem
• Aligns with UAE fintech regulatory clarity initiatives

Stablecoin Requirements:

• Prior CBUAE authorization and ongoing licensing
• Reserve adequacy and segregation requirements
• Transparent redemption mechanisms
• Consumer protection safeguards
• AML/CFT compliance and monitoring
• Interoperability and settlement standards

Fintech and Open Finance Oversight

Federal Decree-Law No. 6 of 2025 significantly expands CBUAE regulatory perimeter to encompass:

• Technology Service Providers – Entities providing core financial technology infrastructure
• Open Finance Ecosystem – Third-party APIs and data sharing frameworks
• Payment Infrastructure Providers – Payment systems operators and settlement infrastructure
• Financial Market Infrastructure – Trading systems, clearing, settlement, and depository services
• Embedded Finance Providers – Non-financial entities offering financial services

New Licensing Categories for Technology Providers:

• Payment system operators and settlement infrastructure [UNVERIFIED - detailed guidance TBD]
• Third-party service providers supporting licensed institutions
• Open banking infrastructure operators

Innovation Framework

The CBUAE promotes innovation through:

• Regulatory sandbox provisions for emerging technologies
• Proportionality in regulatory requirements for fintech startups
• Fast-track licensing for innovative payment mechanisms
• Guidance and safe harbor provisions for new business models
• Coordination with Dubai International Financial Centre (DIFC) for crypto/digital asset innovation

Payments and Money Movement Relevance

Regulatory Scope

The CBUAE exercises comprehensive oversight of all payment services provided in the UAE under the Retail Payment Services and Card Schemes (RPSCS) Regulation and the Payment Token Services Regulation. No entity may provide retail payment services without prior CBUAE licensing.

Licensed Payment Service Categories

The CBUAE licenses and regulates nine distinct categories of payment service providers:

1. Payment Account Issuance Services – Providers offering current accounts, savings accounts, and other payment accounts
2. Payment Instrument Issuance Services – Debit cards, credit cards, and prepaid cards
3. Merchant Acquiring Services – Transaction processing and merchant settlement services
4. Payment Aggregation Services – Multi-service aggregation platforms
5. Domestic Fund Transfer Services – Intra-UAE remittances and payment transfers
6. Cross-Border Fund Transfer Services – International remittances and wire transfers
7. Payment Token Services – Digital token-based payment systems
8. Payment Initiation Services – Third-party payment initiation on behalf of customers
9. Payment Account Information Services – Account aggregation and open banking services

Licensing Requirements

• Mandatory License: No entity may provide listed payment services without prior CBUAE approval
• License Categories: Multiple risk-based license tiers reflecting service complexity and systemic risk
• Application Process: Streamlined application process with prescribed timeframes for CBUAE review
• Ongoing Supervision: Risk-based supervisory framework combining periodic onsite examinations and continuous offsite monitoring
• Timeline for Compliance: Entities must regularize licensing by 16 September 2026 under Federal Decree-Law No. 6 of 2025

Risk-Based Approach

The CBUAE employs a risk-based licensing and supervisory framework that tailors requirements based on:

• Service complexity and systemic importance
• Operational risk profile
• Technology infrastructure maturity
• Compliance history and governance quality
• Consumer protection safeguards

Payment Systems Governed or Overseen

The CBUAE operates and/or oversees the national payment and settlement infrastructure of United Arab Emirates. Comprehensive details on major systems:

UAEFTS (UAE Funds Transfer System) - RTGS

Type: Real-Time Gross Settlement (RTGS) system for interbank payments

Established: 2001

Function: High-value interbank transfers settled in real-time. UAEFTS is used for big interbank transfers that occur at fixed times, providing safe and reliable transmission of high-value and critical interbank payments throughout the UAE.

Key Characteristics:

• Real-time settlement of high-value transactions
• Final and irrevocable payment finality
• Secured infrastructure for critical payment flows
• Interbank connectivity via SWIFT

Aani Instant Payments Platform - IPP (Instant Payment Platform)

Type: 24/7 Instant Payments Platform

Launched: 2023 (operated by Al Etihad Payments, subsidiary of CBUAE)

Function: Immediate consumer and business payment transfers using simple identifiers, available round-the-clock without interruption.

Key Features:

• Transfer limit: Up to AED 50,000 per transaction
• Settlement: Within seconds of initiation
• Identification methods: Phone number, email address, QR code, or IBAN
• Availability: 24/7/365 without downtime
• Aliases: Customers can create custom payment aliases for simplified transfers

National Payment Systems Strategy (NPSS) Integration:

Aani operates under the CBUAE's National Payment Systems Strategy, revolutionizing domestic liquidity management through instant transfers using simple identifiers.

Sources: Aani: UAE's Instant Payments Platform by CBUAE, UAE Central Bank Launches Instant Payment Platform Aani | PYMNTS.com

UAESWITCH - Card Switching Infrastructure

Type: Domestic card switching and processing network

Function: Interbank card switching for debit and credit card transactions, connecting all participating banks and merchants.

Payment Systems Summary Table

Licensed Payment Service Providers (PSPs)

The CBUAE supervises and licenses numerous payment service providers under the Retail Payment Services and Card Schemes (RPSCS) Regulation. Notable licensed PSPs include:

Major Licensed PSPs

Wage Protection System (WPS)

The CBUAE oversees the Wage Protection System (WPS), a mandatory electronic payment system ensuring employers directly transfer wages to employees' bank accounts, protecting worker rights and reducing cash-based informal payments.

Key Features:

• Mandatory for all employers with 50+ employees in private sector
• Direct deposit to employee bank accounts
• Compliance monitoring and enforcement
• Protection of migrant worker wages

Digital Dirham CBDC and Stablecoin Ecosystem

Digital Dirham Project

The CBUAE is developing the Digital Dirham, a central bank digital currency (CBDC) that will serve as legal tender equivalent to physical AED currency.

Status: Under development with distributed ledger infrastructure

Planned Use Cases:

• Wholesale payment mechanisms
• Retail payments (timeline under development)
• Cross-border settlement
• Integration with emerging financial infrastructure

AE Coin - Regulated Dirham-Backed Stablecoin

Initiative: AE Coin project announced April 2025

Partners: International Holding Company (IHC), ADQ, First Abu Dhabi Bank (FAB)

Characteristics:

• Fully regulated UAE dirham-backed stablecoin
• Designed for regulated digital asset ecosystem
• Operates under CBUAE payment services licensing
• Aligned with UAE fintech regulatory clarity initiatives

Relationship to Other Regulators

Financial Stability Council

The UAE established the Financial Stability Council in 2023 to:

• Promote and protect financial stability
• Ensure effective financial system contribution to economic development
• Identify and assess systemic risks
• Coordinate policy response across regulatory authorities
• Evaluate spill-over effects from international financial system stress

The Council continued operations in 2024 with enhanced focus on:

• Macroprudential risk assessment
• Cyber risk and operational resilience
• Climate risk integration into regulatory framework
• Digital asset systemic implications
• Emerging market contagion risks

FATF Compliance and AML/CFT Standards

The UAE completed its Financial Action Task Force (FATF) Action Plan in March 2024, exiting the enhanced monitoring process. This achievement reflects:

• FATF Alignment: CBUAE AML/CFT guidance builds on FATF standards and best practices
• Mutual Evaluation: UAE underwent FATF mutual evaluation process demonstrating compliance
• Wolfsberg Standards: Incorporation of Wolfsberg Group guidance on high-risk jurisdictions
• Ongoing Compliance: Continued participation in FATF working groups and assessments

Basel Committee and International Standards

The CBUAE aligns regulatory frameworks with:

• Basel Committee on Banking Supervision (BCBS) – Capital adequacy (Basel III/IV), liquidity, and operational risk standards
• International Organization of Securities Commissions (IOSCO) – Market integrity standards
• International Association of Insurance Supervisors (IAIS) – Insurance sector standards (under Federal Decree-Law No. 6 of 2025)
• Committee on Payments and Market Infrastructures (CPMI) – Payment system standards

Central Banking Relationships

The CBUAE participates in and coordinates with:

• International Monetary Fund (IMF) – Monetary cooperation, technical assistance, and surveillance
• World Bank Group – Financial sector development and climate finance initiatives
• Arab Monetary Fund (AMF) – Regional monetary and financial cooperation
• Gulf Cooperation Council (GCC) Central Banks – Regional coordination on monetary and payment system stability
• Bank for International Settlements (BIS) – Global financial stability intelligence and central banker forums

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Official Contact Information

Main Address:

Central Bank of the United Arab Emirates

King Abdullah Bin Abdulaziz Al Saud Street

Al Bateen District

Abu Dhabi, United Arab Emirates

Mailing Address:

P.O. Box 854

Abu Dhabi, UAE

Telephone:

+971 2 691 5555

Fax:

+971 2 557 2111

Email:

[email protected]

Operating Hours:

Monday to Friday: 7:30 AM – 2:30 PM (Gulf Time)

Online Resources

Official Website:

https://www.centralbank.ae/en/

CBUAE Rulebook (Regulations & Guidance):

https://rulebook.centralbank.ae/en/

CBUAE Services Portal:

https://services.cbuae.gov.ae/

Enforcement Department:

https://www.centralbank.ae/en/our-operations/enforcement/

Financial Stability Reports:

https://www.centralbank.ae/en/our-operations/financial-stability/

FinTech & Digital Transformation:

https://www.centralbank.ae/en/our-operations/fintech-digital-transformation/

Regulatory Publications and Guidance

• Central Bank Law (Federal Decree-Law No. 6 of 2025): Complete legal text and amendments
• RPSCS Regulation: Retail Payment Services and Card Schemes licensing framework
• SVF Regulation: Stored Value Facilities and digital asset integration
• Consumer Protection Regulation & Standards: Consumer protection framework and expectations
• AML/CFT Rulebook: Anti-money laundering and terrorist financing standards
• Hawala Provider Guidance: Requirements for registered hawala providers
• Banking Supervision Framework: Capital, liquidity, and prudential supervision standards

Regulatory Authorities Coordination

Parallel/Complementary Regulators:

• Capital Markets Authority (CMA): Securities, investment products, and non-payment virtual assets
• Insurance Authority (IA): Insurance sector regulation (consolidated under Federal Decree-Law No. 6 of 2025)
• Dubai International Financial Centre (DIFC): Offshore financial services and innovation hub
• Ministry of Economy: Financial sector policy and legislative coordination

Notes on Naming and Language