Abu Dhabi Institutions Launch Dirham-Pegged Stablecoin

A trio of major Abu Dhabi institutions, including the Emirate’s sovereign wealth fund, have joined forces to launch a new dirham-pegged stablecoin. Abu Dhabi’s sovereign wealth fund ADQ, the United Arab Emirates' largest bank, First Abu Dhabi Bank (FAB), and the massive conglomerate the International Holding Company, have partnered to launch the stablecoin, pending regulatory approval. The trio announced the initiative on April 28, stating that the stablecoin would be regulated by the UAE’s central bank and backed by the country’s currency, the dirham. It will also support use cases such as machine-to-machine and artificial intelligence.

The goal of this initiative is to place the UAE at the “forefront of global blockchain innovation,” while also strengthening the digital infrastructure, according to ADQ. If it receives approval from regulators, the new stablecoin will operate on the ADI blockchain, created by the ADI Foundation, a nonprofit organization dedicated to helping established financial systems and governments advance and adopt blockchain technology. ADQ, established in 2018, is a sovereign wealth fund focused on critical infrastructure and global supply chains. Meanwhile, the International Holding Company is one of the UAE’s largest investment firms and conglomerates with ties to the ruling family of Abu Dhabi, the country’s capital. FAB is the largest bank in the UAE, formed in 2017 through a merger between First Gulf Bank and National Bank of Abu Dhabi.

This move is part of a broader trend where countries are exploring the potential of stablecoins to revolutionize the payments landscape. The UAE's initiative to launch a dirham-backed stablecoin is a significant step forward in its digital transformation journey. It not only enhances the country's financial infrastructure but also positions it as a leader in the adoption of blockchain technology. The stablecoin will be fully regulated by the Central Bank, ensuring compliance with financial regulations and providing users with a secure and trustworthy digital asset. This move is likely to attract more institutional and retail investors to the UAE's digital asset market, further boosting its economic growth and innovation.

The collaboration between ADQ and FAB underscores the growing interest in stablecoins as a means to bridge traditional finance with the burgeoning world of digital assets. By leveraging the stability of the dirham, the stablecoin is expected to offer a reliable medium of exchange for both domestic and international transactions. The launch of this stablecoin is a testament to the region's commitment to fostering a thriving digital economy, driven by innovation and technological advancements. The initiative is part of a broader strategy to enhance the region's digital asset ecosystem and promote blockchain technology adoption. The stablecoin will be issued by FAB and will operate on the ADI blockchain, an infrastructure developed by the UAE's ADI Foundation. This blockchain platform is designed to support a wide range of digital assets and smart contracts, providing a secure and efficient environment for financial transactions.