The United Arab Emirates (UAE) is set to introduce a central bank-regulated stablecoin pegged to the dirham, aiming to provide a secure digital currency for everyday transactions. The initiative, led by the UAE Central Bank in collaboration with major financial institutions, will leverage a locally developed blockchain platform called ADI. This move aligns with the country’s broader strategy to strengthen its digital infrastructure and foster economic innovation1.
Key Details of the UAE Stablecoin Initiative
The stablecoin will be issued by First Abu Dhabi Bank (FAB) and backed 1:1 by dirham reserves, ensuring full transparency and stability2. The ADI blockchain, developed within the UAE, will serve as the underlying technology, with use cases spanning retail payments, cross-border transactions, and AI-driven machine-to-machine projects3. Regulatory oversight will be stringent, with the UAE Central Bank enforcing compliance to prevent algorithmic or privately issued stablecoins4.
This initiative follows the approval of AE Coin in December 2024, the first licensed dirham-pegged stablecoin in the UAE. AE Coin’s reserves are held either fully in cash or a 50-50 split between cash and UAE government bonds5. The new stablecoin expands on this framework, with a consortium including ADQ, FAB, and International Holding Company (IHC) driving institutional adoption6.
Technical and Regulatory Framework
The UAE Central Bank’s regulatory framework ensures that the stablecoin operates within strict guidelines, including mandatory reserves and transaction monitoring. ADI Foundation’s blockchain provides a transparent ledger for auditing, reducing risks associated with volatility or misuse7. Low-cost transactions and partnerships with financial institutions are key features, positioning the stablecoin as a viable alternative to traditional payment systems.
Hassan Al-Suwaidi, CEO of ADQ, emphasized the project’s role in advancing the UAE’s digital economy. The stablecoin’s integration with existing financial systems aims to streamline cross-border payments and retail transactions, reducing reliance on third-party intermediaries8.
Relevance to Security Professionals
For security teams, the introduction of a regulated stablecoin presents both opportunities and challenges. The centralized oversight reduces risks associated with unbacked cryptocurrencies, but the blockchain’s transparency requires robust monitoring to prevent exploits. Key considerations include:
- Transaction Monitoring: Real-time analysis of on-chain activity to detect anomalies or illicit flows.
- Smart Contract Audits: Ensuring the ADI blockchain’s codebase is free from vulnerabilities.
- Regulatory Compliance: Adhering to UAE Central Bank guidelines to avoid penalties.
The stablecoin’s peg to the dirham (itself tied to the USD) mitigates volatility, but its centralized nature could make it a target for nation-state actors or financial fraud schemes9.
Conclusion
The UAE’s dirham-backed stablecoin represents a significant step toward integrating digital currencies into mainstream finance under strict regulatory oversight. Its success will depend on the balance between innovation and security, with the UAE Central Bank playing a pivotal role in ensuring stability. As the project progresses, collaboration between financial institutions and cybersecurity teams will be critical to safeguarding the ecosystem.
References
- “Стейблкоин в ОАЭ, привязанный к дирхаму,” VC.ru, 2025-04-29. [Online]. Available: https://vc.ru/crypto/1956158-steyblkoin-v-oae-privyazannyy-k-dirhamu.
- “ОАЭ планируют запустить привязанную к нацвалюте криптовалюту,” EADaily, 2025-04-29. [Online]. Available: https://eadaily.com/ru/news/2025/04/29/oae-planiruyut-zapustit-privyazannuyu-k-nacvalyute-kriptovalyutu.
- “В ОАЭ одобрили запуск стейблкоина на базе дирхама,” Business Emirates, 2024-10-16. [Online]. Available: https://businessemirates.ae/news/uae-property-news/v-oae-odobrili-zapusk-steyblkoina-na-baze-dirkhama/.
- “Центральный банк ОАЭ одобрил запуск регулируемого стейблкоина страны,” X-Compliance, 2024-10-17. [Online]. Available: https://x-compliance.ru/publications/podft/tsentralnyi-bank-oae-odobril-zapusk-reguliruemogo-steiblkoina-strany.
- “AE Coin Launch,” Russian Home, 2024-12-10. [Online]. Available: https://www.russianhome.com/news/1733843285.shtml.
- “Институциональные гиганты Абу-Даби объединяются для выпуска стейблкоина,” Block-Chain24, 2025-04-29. [Online]. Available: https://www.block-chain24.com/news/novosti-steyblkoinov/institucionalnye-giganty-abu-dabi-obedinyayutsya-dlya-vypuska-steyblkoina.
