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The United Arab Emirates is taking a new step in its ambition to become a global hub for cryptocurrencies. The Abu Dhabi sovereign wealth fund ADQ, the conglomerate International Holding Company (IHC), and First Abu Dhabi Bank (FAB) announced on Monday their collaboration to create a stablecoin backed by the dirham, fully regulated by the Emirati central bank.
In Brief
- The sovereign fund ADQ, the IHC conglomerate, and First Abu Dhabi Bank (FAB) are launching a stablecoin backed by the United Arab Emirates dirham.
- This project will be fully regulated by the Central Bank of the United Arab Emirates.
- This initiative is part of the country’s broader strategy to become a global center for digital assets.
- The stablecoin will operate on the ADI blockchain and will be used for daily transactions.
A new national stablecoin to revolutionize payments
On Monday, April 28, three Emirati financial heavyweights officially announced their joint project of a stablecoin backed by the dirham.
The sovereign wealth fund ADQ, the IHC conglomerate, and First Abu Dhabi Bank, the country’s largest bank by assets, unveiled their ambition to revolutionize digital payments in the region.
This new stablecoin will be issued by FAB, subject to regulatory approval from the Central Bank of the United Arab Emirates.
According to Hana Al Rostamani, CEO of the FAB group, this initiative “represents a transformative step and will revolutionize the way consumers and businesses interact with trusted blockchain payments in the United Arab Emirates.”
The technology will rely on the ADI blockchain, developed by the ADI Foundation which has already established partnerships with more than 20 governments to extend its compliant network.
The targeted applications go beyond simple payments and will include everyday consumer transactions as well as processes based on artificial intelligence.
An ambitious national strategy for digital assets
This initiative is part of a broader approach by the United Arab Emirates to establish itself as a global crypto hub.
The country has rapidly advanced its digital currency strategy, launching the “Digital Dirham” initiative in March 2023 and implementing specific regulations for stablecoins.
As we move toward an increasingly digital and connected economy, the stablecoin will provide a secure, efficient, and scalable solution.
Mohamed Alsuwaidi, CEO and Managing Director of ADQ Group
This is not the country’s first foray into this area. In fact, last December, AE Coin became the first regulated digital currency approved in the United Arab Emirates.
Meanwhile, Tether, issuer of the world’s largest stablecoin, also received authorization to develop a stablecoin in the region in August 2023.
According to Vugar Usi Zade, COO of Bitget, “this initiative, supported by the Central Bank of the United Arab Emirates, could significantly boost confidence in digital assets across the MENA region, especially for retail and institutional users.”
This stablecoin is expected to have a significant impact on finance, commerce, and trading in the United Arab Emirates, further solidifying the country’s position as a pioneer of financial innovation in the Gulf.
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Passionné par le Bitcoin, j’aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l’outil qui peut rendre cela possible.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
