Payment Token Services Regulation

United Arab Emirates2024PaymentsAML/CFT

Overview

The Payment Token Services Regulation (PTSR), issued by the Central Bank of the UAE (CBUAE) in 2020, establishes a licensing and supervisory framework for crypto-based payment tokens used as a means of payment in the UAE. It aims to mitigate risks from virtual assets while enabling innovation in digital payments.

The regulation applies to banks, payment service providers (PSPs), fintechs, exchanges, and other entities offering issuance, buying, selling, or custody of payment tokens. Unlike speculative crypto assets, only tokens approved by the CBUAE may be used as a valid payment instrument.

Key Obligations

Obtain a license from CBUAE before offering payment token services
Restrict activities to approved tokens only (non-speculative, payment-focused)
Implement AML/CFT measures in line with Federal Decree-Law No. 20 of 2018 and FATF guidance on virtual assets
Ensure consumer protection, clear disclosure of risks, fees, and terms

Maintain capital adequacy, governance, and cybersecurity controls
Segregate customer assets and ensure safe custody arrangements
Submit to supervision, inspections, and reporting by CBUAE

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