Three major institutions in the United Arab Emirates have announced plans to launch a new dirham-backed stablecoin, fully regulated by the Central Bank and issued by First Abu Dhabi Bank.
According to an April 28 press release, Abu Dhabi’s sovereign wealth fund ADQ, First Abu Dhabi Bank (FAB), and the International Holding Company (IHC) are teaming up for the project, which aims to bolster the UAE’s digital economy and cement its status as a global fintech leader.
How will the stablecoin function?
The upcoming stablecoin, which will operate on the ADI blockchain, is designed to function as a secure and reliable digital currency for consumers, businesses, and institutions alike.
It will also support emerging technologies, such as machine-to-machine transactions and AI-driven processes, opening the door to new use cases beyond traditional finance.
Described as a “pivotal step” toward strengthening the UAE’s digital infrastructure, ADQ’s Group CEO, Mohamed Hassan Alsuwaidi, said the stablecoin would offer a solution that is “secure, efficient, and scalable,” helping drive growth in the evolving digital economy.
Meanwhile, IHC’s CEO, Syed Basar Shueb, called the initiative a “major breakthrough” for digital currencies that would help position the UAE at the forefront of blockchain innovation.
The ADI blockchain is a next-generation, UAE-developed blockchain platform built by the non-profit ADI Foundation to serve as a compliant distribution network for digital payments.
According to official statements, the ADI blockchain will power the UAE’s new dirham-backed stablecoin initiative, acting as the core infrastructure for its issuance, distribution, and usage across various sectors.
Guillaume de La Tour, CEO of the ADI Foundation, noted that the platform enables “secure, transparent, and efficient transactions at scale,” supporting the UAE’s vision for a digitally connected economy.
The foundation, which already works with governments in more than 20 countries, said the new stablecoin would help drive “secure, transparent, and efficient transactions at scale,” advancing the UAE’s ambition for a digitally empowered economy.
The project is currently awaiting approval from the Central Bank of the United Arab Emirates, and no launch date has been announced yet.
UAE’s stablecoin push
In March 2023, the Central Bank of the UAE launched the “Digital Dirham” initiative as part of its Financial Infrastructure Transformation program.
The move set the foundation for the development and regulation of digital currencies in the country.
To further support this vision, the Central Bank introduced new regulations for stablecoins last year, creating a clear operational framework to guide their issuance and use. Subsequently, the regulator also unveiled the official symbol for the digital dirham in March this year.
However, the new stablecoin will not be the first regulated dirham-pegged product.
Last year, AE Coin became the first regulated digital currency approved for use in the country.
The stablecoin would also compete against a similar offering being developed by Tether, the issuer of the world’s largest stablecoin, USDT.
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