GeIn Abu Dhabi and the wider UAE, the concept of stablecoins is gaining significant traction, with both regulatory developments and new initiatives underway. Here's a brief overview:
Regulatory Landscape:
The Abu Dhabi Global Market (ADGM) has established a comprehensive regulatory framework for digital assets, including stablecoins referred to as Fiat-Referenced Tokens (FRTs). This framework, issued by the Financial Services Regulatory Authority (FSRA), focuses on ensuring financial stability and investor protection through measures like reserve asset requirements, governance, transparent disclosure, and redemption rights. Algorithmic stablecoins are prohibited within ADGM.
The Central Bank of the UAE (CBUAE) has also been actively developing its approach to digital currencies. In March 2023, it launched the "Digital Dirham" initiative, which includes a strategy for stablecoins.
The CBUAE has already granted in-principle approval for at least one AED-backed stablecoin, AE Coin, developed by AED Stablecoin LLC.
Tether, the issuer of the world's largest stablecoin USDT, has also received the green light to develop an AED-backed stablecoin in the UAE.
Recent Developments:
Just yesterday, April 28, 2025, a significant announcement was made regarding a new AED-backed stablecoin being launched by a collaboration of major Abu Dhabi entities: First Abu Dhabi Bank (FAB), the Abu Dhabi sovereign wealth fund ADQ, and the International Holding Company (IHC).
This new stablecoin will be regulated by the CBUAE and issued by FAB.
It will operate on the ADI blockchain, a platform developed in the UAE by the ADI Foundation.
The aim is to facilitate easier payments both locally and internationally and to support emerging digital use cases like machine-to-machine and AI transactions.
UAE Central Bank Digital Currency (CBDC):
In parallel to stablecoin developments, the CBUAE is also progressing with its own Central Bank Digital Currency (CBDC), the Digital Dirham.
The retail launch of the Digital Dirham is anticipated in the fourth quarter of 2025, and it will be considered legal tender.
The Digital Dirham aims to enhance financial inclusion, improve payment efficiency, and support the UAE's move towards a cashless society.
The CBUAE has unveiled a new symbol for the Dirham in both physical and digital forms and is developing a digital wallet for its CBDC.
In summary, Abu Dhabi and the UAE are embracing stablecoins as a key component of their digital financial infrastructure, with both dedicated regulatory frameworks and significant new initiatives underway. This is happening alongside the development and upcoming launch of the UAE's own CBDC, the Digital Dirham, signaling a comprehensive approach to digital currencies in the region.