- by Soham Jethani and Rhea Shah

A customer may pay in stablecoins while the merchant receives dirhams. Network International’s announcement on 9 September 2026 illustrates how this can work: its retail payment pilot uses DDSC, a digital token designed to maintain a value of one UAE dirham per token, but allows merchants to receive sales proceeds in either DDSC or UAE dirhams. This choice of how the merchant is paid, known as settlement, is central to understanding what a stablecoin payment means for the merchant receiving it.[1]

For a merchant considering this payment option, the question goes beyond which settlement option to choose. Before the first transaction, the merchant needs to understand what it is entitled to receive, from whom and at what point in the payment process.

One purchase, different legal positions

Consider a hypothetical AED 500 purchase paid for with a dirham stablecoin permitted for that purpose. The payment could be structured in several ways, each placing the merchant in a different legal position.

The merchant could receive the tokens in a digital wallet that it controls and retain them. It would then need to decide who can access the wallet, who can authorise transfers and how the tokens will be converted into dirhams when required.

Alternatively, a payment provider could receive and hold the tokens on the merchant’s behalf before converting them into dirhams. The merchant might never operate a wallet itself, yet tokens could still be held for it. The Central Bank of the UAE’s Payment Token Services Regulation (“Regulation”) expressly recognises custody and transfer services carried out on behalf of customers, including services that enable merchants to accept payment tokens for goods or services.[2]

In a third arrangement, the merchant could be entitled only to a payment in dirhams from its provider, with the provider receiving the tokens for itself rather than holding them on the merchant’s behalf. These examples illustrate possible structures; they do not describe the contractual arrangements behind Network International’s pilot, which its announcement does not explain.[3]

The distinction matters because receiving dirhams at the end does not, by itself, establish whether the merchant owned tokens earlier in the process. Equally, a customer’s use of stablecoins does not establish that the tokens became the merchant’s property. The agreements and the way the payment is actually handled must be examined together to understand the merchant’s rights.

What does “payment successful” establish?

Return to the hypothetical AED 500 purchase. The checkout confirms a successful payment and the customer leaves with the goods. For a merchant expecting settlement in dirhams, what does that confirmation establish about its right to be paid, and when should the money reach its bank account?

The starting point is the agreement between the merchant and its payment provider, which sets out how payments are processed and the proceeds settled. It should explain whether confirmation at checkout creates an obligation to pay the merchant an agreed dirham amount, less specified fees, or whether that obligation depends on the tokens first being converted. If conversion is delayed, the terms should identify who must resolve the problem and whether, and for how long, settlement may be postponed.

The token transfer has its own legal significance. Article 32(2) of the Regulation requires licensed payment token issuers to specify, in their white paper and customer agreement, when the lawful power to dispose of a token passes from the sending holder to the receiving holder.[4] This concerns the transfer of rights over the token; it does not, by itself, determine when the payment provider must settle a separate dirham payment to the merchant.

What protects the merchant before settlement?

Article 28 of the Regulation requires payment providers within its scope to provide customers with specified terms and information before providing services. These include fees, applicable conversion rates, how tokens are safeguarded, liability for unauthorised token transfers and service levels.[5] For the merchant, this provides a basis for checking what the provider charges, what it undertakes to do and who bears responsibility if a token transfer is unauthorised.

Where the provider holds tokens on the merchant’s behalf, Article 23 adds specific safeguards. It requires payment token custodians and transferors to use designated wallets exclusively for customer payment tokens, maintain records and ensure that no person other than the customer has rights over those tokens.[6] The merchant should establish whether its tokens fall within these safeguards and how the provider’s records identify its entitlement.

If the tokens are converted and the provider then owes the merchant dirhams, a further question arises: what protects the merchant pending payment? The safeguards for customer tokens do not, by themselves, establish protection for a separate dirham debt. The agreement and applicable law must therefore be checked to determine whether the merchant has rights over funds held on its behalf, a claim against the provider for payment, or both. That distinction matters if the provider stops operating before settlement.

What happens when the customer needs a refund?

Suppose the customer returns the item and a refund is due. The merchant has received dirhams, but the customer paid in tokens. The agreement with the payment provider should explain who processes the refund, whether the customer receives tokens or dirhams, how the refund amount is calculated and who bears any conversion or processing costs.

A purchase refund is different from exchanging tokens for money. Article 21 of the Regulation addresses token redemption: a holder presents tokens to their issuer in exchange for their face value in the relevant currency, which is UAE dirhams for a dirham-denominated token.[7] This does not determine how a merchant returns a customer’s payment when goods are returned; that process must be addressed separately with the payment provider.

Testing a refund before launch helps confirm that the payment system can deliver what the merchant’s agreement and customer refund information promise.

Know what the merchant is accepting

The examples above assume that the token and payment services can lawfully be used for the purchase. Article 2 of the Regulation restricts which tokens may be accepted for goods and services and requires providers of payment token services within its scope to hold the necessary licence or registration. Choosing settlement in dirhams does not remove the need to check that the token is permitted for the purchase and that each provider has the required authorisation for its role. Article 2 expressly excludes financial free zones from its references to the UAE, so its territorial scope must also be checked before applying these restrictions.[8]

For the merchant, the commercial decision extends beyond offering another way to pay. It includes deciding whether to hold tokens, to rely on a provider to hold them, or to accept a promise of payment in dirhams, and understanding the rights and risks attached to that choice.

About this article

This article is for general information only and does not constitute legal, regulatory, tax, financial or other professional advice. Readers should not act, or refrain from acting, based on this article without seeking advice from suitably qualified counsel on their specific circumstances.

Septten Advisors is a UAE-registered legal consultancy advising founders, investors, technology companies, financial services businesses and virtual asset market participants on legal, regulatory, transactional and strategic matters. The content reflects our general views as at 28 September 2026 and may not reflect later legal, regulatory or market developments. No advisor-client relationship is created by reading this article. To the fullest extent permitted by law, Septten Advisors accepts no liability for any reliance placed on it.