#AbuDhabiStablecoin As of Tuesday, April 29, 2025, Abu Dhabi is making significant strides in the stablecoin space with a clear focus on regulation and the development of its own Dirham-backed stablecoin.

**Regulatory Landscape:**

The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) has been actively developing a regulatory framework for stablecoins, specifically "Fiat-Referenced Tokens" (FRTs). Key aspects of this framework include:

* **FRT Issuance as a Regulated Activity:** Issuing FRTs is a distinct regulated activity within the ADGM.

* **Prohibition of Algorithmic Stablecoins:** Due to their inherent instability, algorithmic stablecoins are not permitted within the ADGM.

* **Strict Reserve Requirements:** Issuers must maintain 100% of the proceeds in cash and high-quality liquid assets denominated in the same fiat currency as the FRT. These assets must be segregated and held by third-party custodians.

* **Regular Attestation and Audits:** Monthly independent attestations and annual external audits of reserve assets are required to ensure transparency.

* **Restrictions on Promotion as Investments:** FRTs cannot be marketed as investment or savings products.

**Dirham-Backed Stablecoin Initiative:**

A major development is the recent announcement by Abu Dhabi entities IHC, ADQ, and First Abu Dhabi Bank (FAB) to launch a new stablecoin fully backed by the UAE Dirham. This stablecoin will be regulated by the Central Bank of the UAE (CBUAE) and issued by FAB, pending regulatory approval.

Key features of this initiative:

* **Dirham Peg:** The stablecoin will be pegged 1:1 to the UAE Dirham.

* **CBUAE Regulation:** Full regulatory oversight by the UAE's central bank.

* **ADI Blockchain:** It will operate on the ADI blockchain, a technology developed in the UAE.

* **Wide Range of Use Cases:** Aimed at facilitating payments for individuals, businesses, and institutions, as well as supporting emerging digital applications like machine-to-machine and AI transactions.