Abu Dhabi Unveils New Crypto Stablecoin Initiative: Report

According to a Reuters news report, Abu Dhabi, the capital of the United Arab Emirates, plans to launch a new stablecoin to expand its integration with blockchain technology. The stablecoin will be designed to maintain a stable peg to the dirham while being regulated by the UAE Central Bank.

New Dirham-Backed Stablecoin Incoming

A statement seen by Reuters revealed that three entities have collaborated to create the new crypto asset. They are Abu Dhabi’s Wealth Fund (Mubadala Investment Company), First Abu Dhabi Bank (FAB), and International Holding Company (IHC). The partnership aims to establish the country as a hub for blockchain technology. Still, the trio did not reveal the launch date for the upcoming stablecoin.

Stablecoins are digital assets designed to maintain a 1:1 peg to a specific real-world asset, cryptocurrency, or commodity. Over the years, stablecoins backed by the United States dollar have amassed billions of dollars in market value. This market growth is the driving force behind the upcoming dirham-backed digital asset.

Highlighting those who will benefit from the stablecoin upon launch, the three companies mentioned in the statement:

“This stablecoin will be used as a reliable digital currency across a wide range of everyday scenarios – by citizens and consumers, businesses and institutions.”

Aiming to become a global center for digital assets, the UAE has been quick to enable cryptocurrency payments, which has boosted adoption rates and transaction volumes.

Abu Dhabi Embraces Crypto

This is not Abu Dhabi’s first foray into the crypto market. Last month, MGX, an Abu Dhabi sovereign wealth fund, invested $2 billion in Binance for a minority stake. The transaction marked the crypto exchange’s first institutional investment. In another report, Chainlink Labs partnered with the Abu Dhabi Global Market (ADGM) to establish its presence in the region. Months earlier, the decentralized oracle network had set up its regional office in the Middle East.

A recent report confirmed that Coinbase’s soon-to-be-launched Bitcoin Yield Fund attracted backing from Aspen Digital. This Abu Dhabi-based private wealth management platform serves as an exclusive wealth distribution partner across the UAE and Asia.