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Sonic Labs announces move to dirham-regulated stablecoin from US dollars
Regulatory challenges in the United States have forced Sonic Labs to shift its focus from a previously announced USD-based algorithmic stablecoin to a stablecoin backed by the UAE dirham.
Just a week after hinting at the launch of an algorithmic USD stablecoin offering up to 23% APR, Sonic Labs has now scrapped those plans. Co-founder Andre Cronje confirmed the pivot in a post on X, citing regulatory concerns.
“We will no longer be launching a USD-based algorithmic stablecoin. Completely unrelated, we are launching a mathematically linked numerical dirham that will be calculated and denominated in USD, which is definitely not a USD-based algorithmic stablecoin,” Cronje wrote.
Cronje’s statement coincides with the UAE’s plans to launch its blockchain-based digital dirham by the end of 2025. UAE Central Bank Governor Khaled Mohamed Balama has stated that the initiative will enhance financial stability and help combat financial crime. The digital dirham will operate alongside cash, expanding its use in payment channels.
Aglorithmic stablecoins still under scrutiny
Cronje emphasized that their upcoming stablecoin will be calculated and denominated in USD, arguing this design avoids regulatory pitfalls associated with traditional algorithmic models.
The European Union has already banned algorithmic stablecoins under its MiCA regulations, aiming to prevent disasters like the Terra collapse of 2022.
In the U.S., lawmakers are also working on new stablecoin frameworks via the GENIUS Act and the STABLE Act. These bills, expected to be finalized within two months, aim to tighten oversight of stablecoin issuers like Tether, Circle, and Ripple, which are positioning themselves as central players in the regulated market.
Both legislative proposals require a 1:1 reserve ratio and explicitly exclude algorithmic models. As a result, Sonic Labs is choosing to adapt rather than face uncertain regulatory risk in the U.S.
As we wrote, the developers of SonicX, a blockchain game on Solana, are looking to spark user interest by conducting a token airdrop.
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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