Abu Dhabi is advancing its position in the digital finance sector with the introduction of a UAE dirham-pegged stablecoin.
AE Coin: Abu Dhabi’s Dirham-Pegged Stablecoin
In December 2024, the United Arab Emirates launched its first dirham-backed stablecoin, AE Coin, approved by the Central Bank. This initiative is part of the UAE’s broader strategy to become a global hub for cryptocurrency and blockchain technology.
Tether’s Upcoming Dirham-Pegged Stablecoin
Tether, the company behind the widely used USDT stablecoin, announced plans in August 2024 to introduce a new stablecoin pegged to the UAE dirham. This move aims to meet the growing demand for the Gulf currency and provide an alternative to the U.S. dollar in digital transactions. The dirham-backed stablecoin will be fully backed by UAE reserves and launched in partnership with Abu Dhabi-based Phoenix Group and Green Acorn Investment. The product’s release is pending approval from the UAE Central Bank, expected within a few months.
Strategic Investments in Blockchain
Abu Dhabi’s sovereign wealth fund, Mubadala, through its investment arm MGX, has made significant investments in the blockchain sector. Notably, MGX acquired a $2 billion minority stake in cryptocurrency exchange Binance, marking a strategic shift towards digital finance. This investment underscores the UAE’s commitment to integrating blockchain technology into its financial infrastructure.
These developments reflect Abu Dhabi’s proactive approach to embracing digital currencies and blockchain technology, positioning the emirate as a leader in the evolving landscape of global finance.