"Abu Dhabi Stablecoin" refers to two distinct but related developments in the stablecoin space in Abu Dhabi, United Arab Emirates:
1. A Stablecoin backed by the United Arab Emirates Dirham (AED):
Development: A consortium of key entities in Abu Dhabi, including the International Holding Company (IHC), ADQ (a sovereign wealth fund), and First Abu Dhabi Bank (FAB), announced plans to launch a stablecoin backed by the United Arab Emirates Dirham.
Regulation: This stablecoin will be fully regulated by the Central Bank of the United Arab Emirates (CBUAE).
Objective: It is expected to facilitate payment solutions for consumers and businesses within the United Arab Emirates. The stablecoin will operate on the ADI blockchain.
Implications: This move underscores the UAE's commitment to providing a secure and regulated environment for the use and trading of cryptocurrencies and positions the country at the forefront of blockchain innovation.
2. Regulatory approval for Circle (issuer of USDC):
Development: Circle, the issuer of the second largest stablecoin by market capitalization, USDC, received "in principle" regulatory approval from the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM). The ADGM is an international financial center and free zone in Abu Dhabi.
Objective: This approval paves the way for the expansion of Circle's and USDC's operations in the Middle East.
Context: This development comes at a time when Circle has been actively seeking regulatory compliance in various jurisdictions, such as the European Union with MiCA and Japan.
In summary:
There is an effort to launch a new stablecoin specifically backed by the local currency, the UAE Dirham, with the support of major institutions in Abu Dhabi and oversight from the central bank.
