Abu Dhabi Drops Dirham-Pegged Stablecoin—Big Banks Jump On Board

Move over Tether—the UAE’s capital just fired a shot in the stablecoin wars. Abu Dhabi’s new digital Dirham project, backed by heavyweight financial players, aims to bridge crypto and traditional finance.

Why it matters: This isn’t some DeFi upstart. Institutional backing gives this stablecoin instant credibility—and could pressure regional rivals like Saudi Arabia to play catch-up.

The fine print: Pegged 1:1 to the UAE Dirham, the stablecoin promises ’regulatory compliance’ and ’institutional-grade infrastructure.’ Translation: bankers finally found a crypto toy they’re willing to touch.

Bottom line: When oil money meets blockchain, things get interesting. Just don’t expect them to understand ’decentralization.’

‘Digital Dirham’

The UAE Central Bank has been moving quickly to advance its digital currency strategy. In March 2023, it launched the “Digital Dirham” initiative. 

Last year, the bank introduced regulations for stablecoins, aiming to create a clear operational framework for the sector. To reinforce this strategy, the central bank recently unveiled a new symbol for the digital dirham.

Mohamed Alsuwaidi, Managing Director and Group CEO of ADQ, said the launch marks “a pivotal step” in strengthening the UAE’s digital infrastructure. 

“As we move towards an increasingly digital and connected economy, the stablecoin will provide a solution that is secure, efficient and scalable,” Alsuwaidi said.

The ADI blockchain, developed by the ADI Foundation, will serve as the backbone for the new stablecoin. The foundation has established partnerships with governments in over 20 countries to expand its compliant blockchain distribution network.

The UAE has been building momentum in the digital asset space. The Abu Dhabi Global market and Dubai’s Virtual Assets Regulatory Authority have already implemented frameworks for regulating cryptocurrencies. 

In December, AE Coin became the first regulated digital currency approved in the UAE. Meanwhile, Tether, issuer of USDT (USDT) — the world’s largest stablecoin — also received approval last August to develop a stablecoin in the region.

The new dirham-backed stablecoin is expected to have a “significant impact” across finance, commerce, and trade, the companies said.