The United Arab Emirates is taking another major step toward becoming a global hub for digital assets. On April 28, 2025, Abu Dhabi’s sovereign wealth fund ADQ, leading conglomerate International Holding Company (IHC), and First Abu Dhabi Bank (FAB) announced they are teaming up to launch a brand-new dirham-backed stablecoin.
This move reflects the UAE’s growing ambition to cement its position as a leader in the cryptocurrency space, while offering a regulated and reliable digital payment option for its citizens and businesses.
A New Stablecoin for the UAE
According to a joint statement, the new stablecoin will be issued by FAB and fully regulated by the UAE’s central bank, pending final approval.
The goal is clear: to create a stable digital currency that can be used seamlessly across daily life, from personal transactions to business operations.
“This stablecoin will be used as a reliable digital currency across a wide range of everyday scenarios — by citizens and consumers, businesses, and institutions,” the statement emphasized.
Stablecoins, which are cryptocurrencies tied to traditional currencies like the U.S. dollar or UAE dirham, have seen rapid adoption globally. They offer the speed and flexibility of crypto without the extreme volatility of coins like Bitcoin.
The UAE’s Growing Crypto Ambitions
This announcement follows several recent initiatives showing that the UAE is serious about digital assets.
- In December 2024, the UAE introduced its first dirham-backed stablecoin, AE Coin.
- In March 2025, investment group MGX made a major $2 billion investment in Binance, one of the largest crypto investments on record.
By backing these efforts with top-tier institutions like ADQ, IHC, and FAB, Abu Dhabi is signaling that it wants to lead not just regionally, but globally, in crypto innovation.
Why Stablecoins Matter
Stablecoins are essential for bringing cryptocurrency into the mainstream. They are typically backed 1:1 with a reserve of real-world assets, like fiat currencies, to maintain a stable value.
This stability makes them useful for:
- Everyday payments
- Cross-border transactions
- Trading between different crypto assets
- Protecting savings against volatility in crypto markets
By launching a dirham-backed stablecoin, the UAE can offer a trusted, local alternative to dollar-based stablecoins like USDT (Tether) and USDC.
A Fully Regulated Future
One key difference with the new Abu Dhabi-backed stablecoin is that it will be fully regulated. This contrasts with many stablecoins operating today, which face growing scrutiny from regulators worldwide.
The UAE’s proactive approach ensures users have the protections of a regulated financial product while enjoying the benefits of crypto speed and flexibility. It also supports the country’s broader strategy of building a trusted digital economy.
With regulation built in from the start, this stablecoin could become an attractive option for consumers, businesses, and even institutions seeking compliant digital payment methods.
How It Fits Into Global Crypto Trends
The move also reflects broader global trends where governments and major banks are becoming more involved in digital assets.
In Europe, the Markets in Crypto-Assets (MiCA) regulation is rolling out strict rules for crypto assets. In the U.S., policymakers are debating several bills to regulate stablecoins and crypto platforms.
Rather than fighting crypto adoption, the UAE is embracing it — but in a structured and secure way.
Their strategy could serve as a model for other countries trying to balance innovation with consumer protection.
Looking Ahead: What to Expect
While an exact launch date for the new dirham-backed stablecoin has not been announced yet, the focus on regulation and large institutional support suggests a fast-tracked rollout once final approvals are in place.
If successful, it could:
- Boost crypto payment adoption across the UAE
- Enable more efficient digital transactions for businesses
- Strengthen the UAE’s position as a crypto and fintech leader
- Offer a model for stablecoin regulation worldwide
Moreover, by building a native, regulated stablecoin ecosystem, Abu Dhabi reduces reliance on foreign digital currencies and asserts greater financial sovereignty in the Web3 era.
Conclusion: Abu Dhabi’s Bold Bet on Digital Finance
With ADQ, IHC, and FAB working together, and with the full support of the UAE’s central bank, Abu Dhabi is showing that it’s serious about leading the next wave of crypto innovation.
The launch of a regulated dirham-backed stablecoin could mark a turning point for digital payments in the region, offering citizens, businesses, and institutions a faster, safer, and more trusted way to engage with the crypto economy.
As the world watches, the UAE is proving that thoughtful regulation and bold investment can go hand in hand to shape the future of finance.
