CBUAE Capital Requirements for Stablecoin Services Providers
Regulatory Capital Under the Payment Token Services Regulation (Circular No. 2/2024)
A practical, article-based guide to regulatory capital for Payment Token Issuers, Custody & Transfer Providers, and Conversion Providers, including the AED thresholds, percentage buffers, and the Central Bank’s discretion to impose higher requirements.
What We Deliver
- Capital Structuring
- Regulatory Capital
- Issuer Capital + Percentage
- Article 14 Monthly-average modelling
- Bank Guarantee Structuring Support
- Prudential Narrative Drafting
- Wind-Down and Refunding
The CBUAE Approach
Prudential Capital, Not Check-the-Box
Under the CBUAE Payment Token Services Regulation (Circular No. 2/2024), capital is a prudential safeguard. The Central Bank evaluates whether your regulatory capital and financial resources are sufficient to run your model safely and sustainably and to protect customers, including through an orderly wind-down and refunding process.
Capital Composition
What "Regulatory Capital" Consists Of (Capital Items)
A Licensed Payment Token Service Provider’s aggregate regulatory capital consists of:
1
Paid-up capital
2
Reserves (excluding revaluation reserves)
3
Retained earnings
ℹ️ This composition matters because it determines what counts toward meeting the regulatory capital requirement.
Issuer Capital Requirements
Capital Requirements for Licensed Payment Token Issuers (Stablecoin Issuers)
CBUAE imposes a base capital + proportional buffer model for Issuers.
Default Track
Article 13(1)
A. Default issuer capital
A Licensed Payment Token Issuer must maintain at least:
AED 15,000,000 (initial and ongoing capital);
Plus
0.5% of the fiat-currency face value of outstanding Payment Tokens as additional ongoing capital.
This means as issuance grows, the required capital buffer grows with the total outstanding token liability.
Alternative Reserve Track
Article 13(2) linked to Article 22(3)
B. Alternative Reserve of Assets track
If the Issuer is subject to the alternative requirement for the Reserve of Assets under Article 22(3), then instead of the default issuer buffer above, the Issuer must maintain at least:
AED 15,000,000 (initial and ongoing capital);
Plus
2% of the fiat-currency face value of outstanding Payment Tokens as additional ongoing capital.
This means as issuance grows, the required capital buffer grows with the total outstanding token liability.
Article 15(4)
C. Mandatory bank guarantee
In addition to meeting the capital requirement, the Licensee must submit to the Central Bank (with the licence application) an:
- unconditional irrevocable bank guarantee,
- equal to the full paid-up capital amount,
- in favour of the Central Bank, payable upon first demand,
- which must remain in place at all times.
⚠️ This is separate from the Reserve of Assets and is an additional prudential protection.
Article 15(5)–(7)
D. Sufficiency, source of funds & wind-down capacity
Beyond numeric thresholds, a Licensed Issuer must demonstrate:
- its regulatory capital and other financial resources are sufficient for the business model, without compromising customer interests;
- clear details on source of funds supporting the proposed business; and
- ability to maintain sufficient resources for an orderly wind-down, including a smooth refunding process.
Custody & Conversion Capital
Capital Requirements for Custody & Transfer Providers And Conversion Providers ( Article 14 )
For Licensed Payment Token Service Providers performing Payment Token Custody & Transfer or Payment Token Conversion, capital is tiered by monthly average transfer volume.
A. Tier 1 — High transfer value
Article 14(1)(a)
Monthly Average ≥ AED 10M
Where the monthly average value of Payment Token Transfers initiated, facilitated, effected, directed, or received by the provider is:
AED 10,000,000 or above, the provider must hold regulatory capital of at least:
- AED 3,000,000
B. Tier 2 — Lower transfer value
Article 14(1)(b)
Monthly Average < AED 10M
Where the monthly average value is:
less than AED 10,000,000, the provider must hold regulatory capital of at least:
- AED 1,500,000
📈
Article 14(2)
C. Step-up rule when you cross the threshold
If a provider in the AED 1.5m tier exceeds AED 10m monthly average transfers for three consecutive months, it must:
- Report this fact to the Central Bank; and
- Become subject to the higher capital requirement (AED 3m).
Article 14(3)
D. How the monthly average is calculated
The monthly average value must:
- Be calculated on the moving average of the preceding three months (or, when newly licensed, based on business plan and financial projections); and
- Include transfers initiated/facilitated/effected/directed and those received by the provider.
CBUAE Discretion
The Central Bank May Require Higher Capital (Article 15)
CBUAE may impose aggregate regulatory capital requirements higher than those in Articles 13 and 14 where, considering the scale and complexity of the Licensee’s business, higher capital is essential to ensure the Licensee can fulfil obligations under the Regulation.
⚠️ Applicants must also provide information on the source(s) of funds constituting the regulatory capital held under Articles 13 or 14.
Capital vs Reserve
Capital vs Reserve — Do Not Confuse the Two
For issuers, the Reserve of Assets is separate from regulatory capital.
Reserve of Assets
Backs token liabilities and supports redemption.
Regulatory capital
Is the issuer’s prudential buffer and loss-absorbing capacity.
CBUAE expects both to be robust, segregated, and auditable.
PRACTICAL CAPITAL PLANNING
What "Licensing-Ready" Looks Like
To be capital-ready for a CBUAE file, applicants should prepare:
- A capital structure narrative aligned to the authorised activities;
- Evidence that paid-up capital is funded and unencumbered;
- Source-of-funds documentation;
- Financial projections demonstrating sustainability;
- Transfer-volume projections supporting Article 14 tier selection;
- Wind-down funding plan (including refunding mechanics); and
- Bank guarantee coordination and documentation (for issuers).
What We Deliver
What CRYPTOVERSE Legal Delivers
Capital Structuring
Activity-based tier optimisation (Issuer vs Custody/Transfer vs Conversion).
Regulatory Capital Composition
Capital composition mapping and evidence pack design.
Issuer Capital + Percentage Buffer
Buffer modelling (0.5% vs 2% scenarios).
Article 14 Monthly-Average Modelling
Monitoring and step-up governance.
Bank Guarantee
Structuring support (issuer track).
Prudential Narrative Drafting
Narrative drafting for the application file.
Wind-Down
Wind-down and refunding financial resource planning.
FAQs
FAQs
Yes, Articles 13 and 14 prescribe specific AED minimums and percentage buffers for licensed activities, and Article 15 allows the Central Bank to require higher capital based on scale and complexity.
For Licensed Payment Token Issuers: AED 15m plus a percentage of outstanding token face value (0.5% under the default rule, or 2% under the alternative Reserve of Assets track).
Yes, AED 1.5m or AED 3m depending on monthly average transfer volumes, with a reporting and step-up obligation once thresholds are exceeded for three consecutive months.
Yes for issuers, an unconditional irrevocable guarantee equal to full paid-up capital must remain in place at all times.
Get Started
Structure Your Regulatory Capital Correctly
From capital composition mapping and buffer modelling through bank guarantee coordination and wind-down planning — we ensure your capital structure meets CBUAE expectations from day one.