IHC, ADQ, and First Abu Dhabi Bank (FAB) have announced their plans to launch a stablecoin backed by Dirhams, fully regulated by the Central Bank of the United Arab Emirates (CBUAE) and issued by the UAE’s largest bank, FAB, pending regulatory approval. This innovative stablecoin is set to revolutionize the ease of making payments and conducting business, both locally and globally, positioning the UAE at the forefront of global blockchain innovation as a leading fintech hub while strengthening the UAE’s digital infrastructure.
A stablecoin is fundamentally a cryptocurrency whose value is tied to another currency or financial instrument, in this instance, the UAE Dirham. This peg allows the stablecoin to serve as a reliable medium of exchange, benefiting from the lower volatility associated with fiat currencies, unlike other more volatile cryptocurrencies. A well-known stablecoin, Tether (USDT), is backed by U.S. dollar reserves and currently ranks as the third largest cryptocurrency, boasting a market cap of $148 billion, which reflects its widespread adoption.
Enhancing payment solutions
The stablecoin backed by Dirhams is crafted to facilitate payments in a world where identity, governance, and value flow freely, securely, and verifiably. This digital currency will serve as a reliable medium across a broad spectrum of everyday scenarios—benefiting citizens and consumers, businesses, and institutions alike. Additionally, it will support emerging digital use cases, including machine-to-machine transactions and artificial intelligence applications.
ADI blockchain
The new stablecoin will operate on the ADI blockchain, an advanced technology developed in the UAE by the ADI Foundation, which will establish a compliant distribution network for blockchain payments. The ADI Foundation bridges established financial systems with next-generation blockchain technology to create real-world impact, enabling citizens of emerging economies to compete and operate on a global scale, a feat that was previously unattainable. The foundation already boasts strategic partnerships with governments in over 20 countries.
Strengthening UAE’s digital infrastructure ecosystem
Mohamed Hassan Alsuwaidi, managing director and group CEO of ADQ, stated: “The launch of the stablecoin marks a pivotal step in our commitment to strengthening the UAE’s digital infrastructure ecosystem. As we move forward toward an increasingly digital and connected economy, the stablecoin will provide a solution that is secure, efficient, and scalable, while creating new opportunities for growth and value creation.”
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Commitment to digital currency development
Syed Basar Shueb, CEO of IHC, added: “This new stablecoin represents a major breakthrough in the development of digital currencies, and we are proud to have played a key role in its creation. By bringing IHC’s expertise in blockchain and fintech, we look forward to working with our partners to explore its vast potential and drive innovation in the UAE.”
Hana Al Rostamani, group chief executive officer of FAB, affirmed: “As a founding partner of this leading technology, FAB is proud to be at the forefront of global innovation, driving continued growth within the UAE’s dynamic fintech sector. This new stablecoin represents a transformative step forward and will revolutionize the way both consumers and businesses engage with trusted blockchain payments in the UAE.”
Additionally, Guillaume de La Tour, CEO of ADI Foundation, commented: “This stablecoin marks a pivotal milestone in the UAE’s journey toward a more inclusive and digitally empowered economy. By leveraging the ADI blockchain, we are enabling secure, transparent, and efficient transactions at scale—built on technology developed right here in the UAE. The ADI Foundation is proud to support this visionary initiative that aligns with our mission to advance sustainable digital transformation around the world.”
The new stablecoin is anticipated to significantly impact various industries, including finance, commerce, and trade. Its launch further marks an essential step towards realizing the UAE’s vision of becoming a leading hub for innovation and financial technology.
Transforming payment dynamics
“Statements released by the giants backing the new stablecoin suggest it will change the dynamics of making payments and significantly enhance the ease of doing business. The coin, fully regulated by the Central Bank of the UAE, would be used as a reliable digital currency by consumers, businesses and institutions, both locally and globally. It will also support innovative digital applications like machine-to-machine transactions and AI. This currency is expected to have a significant impact on finance, commerce, trade, and other sectors in the UAE, establishing a reliable blockchain payment system in the country,” remarked Vijay Valecha, chief investment officer at Century Financial, to Economy Middle East.
“The launch of this stablecoin follows the Digital Dirham strategy, implemented in March 2023, along with regulations on stablecoins from last year. The ADGM and Dubai’s Virtual Assets Regulatory Authority already have frameworks for cryptocurrencies in place. The approval of AE Coin, UAE’s first digital currency and the launch of the new digital-oriented UAE Dirham symbol clearly show the path of the UAE’s government regarding the adoption of digital assets. The strategy aims to strengthen the UAE’s digital infrastructure ecosystem and is in line with the country’s vision of establishing itself as a global hub for innovation and technology,” Valecha further noted.
