Abu Dhabi Institutional Giants Unite to Launch Dirham-Backed Stablecoin
Fhumulani Lukoto
- 2 min read
Key Takeaways
Strategic National Collaboration:
Major Abu Dhabi institutions, including Mubadala, ADGM, and FAB, are jointly developing a dirham-pegged stablecoin to drive innovation in digital finance and enhance the UAE’s global fintech leadership.
Economic and Financial Benefits:
The stablecoin aims to streamline cross-border payments, lower transaction costs, and boost financial inclusion by offering individuals and businesses a secure, blockchain-based alternative.
Strong Regulatory Framework:
Backed by clear compliance protocols and regulatory oversight, the initiative ensures transparency, KYC/AML alignment, and trust — positioning the UAE as a secure environment for digital asset adoption.
As the global race to develop sovereign-backed digital currencies intensifies, Abu Dhabi’s financial powerhouses have boldly collaborated on a dirham-backed stablecoin initiative.
Overview
On April 28 2025, the three companies, Abu Dhabi’s sovereign wealth fund ADQ, the United Arab Emirates’ largest bank and First Abu Dhabi Bank (FAB), announced that they partnered to launch the stablecoin, pending regulatory approval. This strategic alliance among some of the UAE’s most prominent institutional players is poised to reshape the regional digital asset ecosystem and reinforce the dirham’s role in global finance.
Strategic Collaboration for Digital Innovation
In a significant step toward digitising the UAE’s financial infrastructure, Abu Dhabi’s largest institutional entities — including state-backed investment funds, regulatory bodies, and financial service firms — have announced a joint effort to launch a dirham-pegged stablecoin. This partnership is a significant endorsement of blockchain-based payment systems and signals growing confidence in tokenised currencies as part of the UAE’s financial future. The key players include Mubadala Investment Company, the Abu Dhabi Global Market (ADGM), and First Abu Dhabi Bank (FAB).
Their goal is to create a compliant, transparent, and scalable stablecoin fully backed by reserves in UAE dirhams. This digital asset is expected to operate on a blockchain platform, enabling faster, more efficient cross-border settlements and enhancing the local digital finance infrastructure. The UAE has been at the forefront of digital innovation in the Middle East, and this move aligns with its vision to become a global hub for Web3 technologies and digital finance. By leveraging the strength of its institutional investors and regulators, Abu Dhabi aims to create a trusted ecosystem that encourages both domestic and international adoption of its stablecoin.
Boosting Economic Efficiency and Financial Inclusion
A dirham-backed stablecoin could bring sweeping benefits to the UAE economy and beyond. It is expected to lower the cost and friction of cross-border transactions—a critical factor in the Gulf region, where trade and international remittances are key components of economic activity. By enabling instant and borderless payments, the stablecoin can help businesses settle transactions in real-time, improving cash flow and operational efficiency. Moreover, the stablecoin initiative supports the UAE’s long-term financial inclusion goals. It can provide a secure and accessible payment solution for individuals and SMEs that traditional banking services may underserve.
With mobile and digital wallets becoming more common in the region, the stablecoin could offer a reliable alternative to physical cash, especially in remote or underbanked areas. The dirham stablecoin may also serve as a tool for more efficient government disbursements and public service payments, particularly as smart contracts and blockchain automation become more integrated into financial systems. This would support the UAE’s establishment of a digitally native, inclusive economy that leverages the best of decentralised technology.
Regulatory Oversight and Global Impact
One of the most crucial aspects of the project is its emphasis on regulatory compliance and transparency. The involvement of ADGM ensures that the stablecoin will adhere to robust financial standards, including anti-money laundering (AML) and know-your-customer (KYC) regulations. This commitment to governance is expected to increase trust among users, businesses, and investors — both within the UAE and internationally. In the global context, the dirham-backed stablecoin could serve as a regional alternative to US dollar-pegged stablecoins like USDT and USDC, which dominate crypto markets.
As countries worldwide explore their central bank digital currencies (CBDCs) and stablecoin projects, Abu Dhabi’s move positions the UAE as a thought leader and innovator. By offering a compliant, efficient, and sovereign-backed digital currency, the UAE could attract more fintech startups, institutional investors, and cross-border partnerships — strengthening its position as a digital economy powerhouse. This initiative aligns with the broader Gulf Cooperation Council (GCC) ambitions to foster regional digital integration and financial modernisation.
Abu Dhabi’s institutional giants coming together to develop a dirham-backed stablecoin marks a transformative moment for the UAE’s financial sector. With strong regulatory backing, clear economic benefits, and global ambitions, this stablecoin initiative could redefine how value is exchanged across borders — and set the stage for the next chapter in digital finance in the Middle East.
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Fhumulani Lukoto
Cryptocurrency Journalist
Fhumulani Lukoto holds a Bachelors Degree in Journalism enabling her to become the writer she is today. Her passion for cryptocurrency and bitcoin started in 2021 when she began producing content in the space. A naturally inquisitive person, she dove head first into all things crypto to gain the huge wealth of knowledge she has today. Based out of Gauteng, South Africa, Fhumulani is a core member of the content team at Coin Insider.