New UAE stablecoin initiative to empower businesses with blockchain for seamless transactions

Vijay Valecha, Middle East Economy, April 29, 2025

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.

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.

Source