Abu Dhabi’s sovereign wealth fund ADQ, conglomerate IHC, and First Abu Dhabi Bank (FAB) announced a plan to launch a new stablecoin backed by the UAE dirham. The move marks another step in the country’s efforts to expand its digital economy.
FAB will issue the stablecoin under its authority, and the UAE Central Bank will fully regulate it upon approval. The two businesses jointly revealed the plan on Monday. The stablecoin will be a stable digital currency for individuals, institutions, and businesses, as stated by the businesses.
It’s a part of a wider drive by the UAE to make itself a digital asset and blockchain technology hub. Developers tie stablecoins to mainstream currencies such as the U.S. dollar to maintain a stable valuation.
They have enjoyed great popularity among the trading community and consumers alike, providing a cheaper and quicker option over the use of traditional banks. With the new stablecoin, the UAE hopes the use of digital currencies will gain more trust for day-to-day transactions.
Stablecoin to boost secure, fast transactions across sectors
The UAE has ushered in rapid development in the digital asset market. It launched AE Coin, the country’s first stablecoin backed by the dirham, in December. Investment company MGX completed a $2 billion acquisition of a stake in exchange operator Binance in the previous month, one of the largest cryptocurrency industry transactions.
These initiatives demonstrate the nation’s intent towards a leadership role within the digital economy. The stablecoin will strive towards developing a seamless gateway between the traditional economy and the new world of digital transactions.
It will enable quicker, safer transactions across different industries, aiding the development of the national economy. The stablecoin also aims, under the supervision of the Central Bank, to give security and trust to the users in a landscape of uncertainty.
UAE aims to attract global investors and tech firms
The launch of a regulated dirham-backed stablecoin would be a driver of more regional innovation. It also makes Abu Dhabi and the broader UAE contenders with other finance hubs heavily invested in digital assets.
By promoting the application of blockchain technology under rigorous regulation, the UAE aims to entice international investors and technology companies.
While the digital asset market continues evolving, the UAE plan shows a clear intent towards harmonizing regulation and innovation. At the helm of this initiative are industry leaders such as ADQ, IHC, and FAB, propelling the nation towards the vision of a global digital economy leader.
