UAE unveils dirham-backed stablecoin to boost digital payments
FAB will issue the new stablecoin, pending approval from the Central Bank
In a landmark move, the United Arab Emirates has unveiled a Dirham-backed stablecoin, jointly developed by three major financial and investment entities—International Holding Company (IHC), ADQ, and First Abu Dhabi Bank (FAB).
The initiative is part of the UAE’s aggressive push to become a global leader in fintech, challenging the dominance of US dollar-backed digital currencies like Tether, which currently holds 90% of the $230 billion stablecoin market.
FAB will issue the new stablecoin, pending approval from the Central Bank of the UAE, and deploy it on the ADI blockchain, a locally developed platform. This marks a significant step in expanding secure, fast, and legal digital payment systems both locally and globally.
Key takeaways
- UAE launches Dirham-backed stablecoin on ADI blockchain
- Joint effort by IHC, ADQ, and FAB with regulatory backing
- The coin will be issued by FAB, subject to Central Bank approval, ensuring strong compliance and oversight.
- Strategic move to rival USD-backed stablecoins
- The launch aligns with UAE's recent digital finance initiatives, including AE Coin and a $2B crypto investment by MGX.
A sovereign step toward decentralized finance
The UAE’s new stablecoin, pegged to the Dirham and issued on the ADI blockchain, is being touted as a transformative tool for safe, efficient, and scalable digital transactions. From peer-to-peer payments to enterprise-level smart finance, the coin is designed to support both current and future financial use cases, including IoT integration and AI-driven automation.
The new stablecoin is a collaborative venture between IHC, a major holding company; ADQ, one of the region’s largest investment firms; and FAB, the UAE’s largest bank. Once regulatory approval is granted, FAB will handle issuance, ensuring transparency and legal soundness under the Central Bank's supervision.
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Challenging the dollar's digital dominance
By introducing a Dirham-based alternative, the UAE is directly addressing global concerns about overreliance on USD-backed stablecoins, particularly amid rising geopolitical tensions and sanctions.
According to Citigroup data, the leadership was consolidated for US dollar-backed stablecoins: Tether occupies 90% of the market ($230 billion), with capitalization growth of 54% over the year.
Stablecoin market cap. Source: Citigroup
This launch builds on previous milestones like AE Coin and strategic crypto investments, reinforcing Abu Dhabi’s ambitions to be a global fintech and blockchain hub. The move aligns with a long-term vision of financial diversification and sovereign digital infrastructure.
The UAE’s Dirham-backed stablecoin marks a pivotal moment in the global evolution of digital currencies. By blending innovation with regulation, the country is setting the stage for a broader shift in how nations manage and issue digital money. All eyes are now on how quickly the Central Bank will greenlight the launch—and how the market will respond.
We also informed you earlier that Circle debuts USDC-based remittance platform amid stablecoin growth.
