Abu Dhabi, April 29, 2025 – In a groundbreaking move for the Middle East’s financial and digital asset sectors, three of Abu Dhabi’s most prominent entities — ADQ, International Holding Company (IHC), and First Abu Dhabi Bank (FAB) — have announced the launch of a new dirham-backed stablecoin. The initiative, fully regulated by the UAE Central Bank, is poised to significantly advance the nation’s ambitious digital economy plans.

The stablecoin, pegged 1:1 to the UAE dirham, is expected to provide a secure, transparent, and efficient on-ramp for businesses and individuals looking to transact in digital assets within a regulated environment. Officials confirmed that this project is a major pillar of the UAE’s broader strategy to position itself as a global hub for blockchain innovation, financial technology, and virtual assets.

Strategic Alignment with National GoalsThe UAE has been aggressively investing in digital asset infrastructure, from issuing virtual asset regulations to establishing specialized regulatory bodies like VARA (Virtual Assets Regulatory Authority) in Dubai. By introducing a homegrown, dirham-backed stablecoin, Abu Dhabi is taking a major step toward ensuring that financial innovation remains closely aligned with monetary stability and sovereign oversight.

“This launch is not only a milestone for the UAE’s digital economy but also a testament to our commitment to responsible innovation,” a joint statement from ADQ, IHC, and FAB said. “With full backing from the Central Bank, we aim to provide trust, speed, and security to digital transactions both domestically and internationally.”

Impact on Markets and BusinessAnalysts predict that a regulated dirham stablecoin could enhance cross-border trade, facilitate faster remittances, streamline business transactions, and support the burgeoning Web3 and fintech ecosystems across the region.

Unlike many stablecoins globally that are backed by baskets of assets or opaque reserves, the UAE’s approach emphasizes direct, clear, and sovereign asset backing — offering new levels of credibility in a sector often criticized for lacking transparency.

Looking AheadThe trio of powerhouse institutions is expected to roll out the stablecoin initially for corporate and institutional clients, with plans to gradually open it up for retail use. A phased rollout, subject to regulatory milestones and market readiness, will ensure that the project maintains stability and gains public trust.

The move positions Abu Dhabi — and by extension, the UAE — firmly on the map as one of the most progressive, regulated environments for digital asset innovation globally.