Abu Dhabi's Wealth Fund and Major Banks Team Up to Launch New Stablecoin

By Federico Maccioni

DUBAI (Cryptonesia) – The Abu Dhabi-based sovereign wealth fund ADQ, the diversified holding company IHC, and the largest bank in the UAE by asset size, First Abu Dhabi Bank (FAB), announced their plans on Monday to introduce a new stablecoin pegged to the Dirham. This move reflects the increasing engagement of the Gulf nation with digital currencies.

The stablecoin, set to be completely overseen by the UAE’s central bank, will be launched by FAB pending regulatory consent, according to a joint statement from the three firms involved.

"As a dependable digital money, this stablecoin will be utilized in numerous daily situations — by both individuals and consumers, as well as businesses and organizations," they stated.

Stablecoins are digital assets intended to maintain a steady worth pegged to conventional currencies like the U.S. dollar. These coins have experienced swift expansion, serving not only as a means of payment but also appealing to traders looking to operate beyond the confines of the regulated financial sector.

The UAE, with ambitions to be a leading hub for digital assets globally, has swiftly embraced cryptocurrency payments. This move has significantly increased both the uptake and the volume of transactions.

In December, the state launched its inaugural UAE dirham-pegged stablecoin called AE Coin. Last month, an investment firm named MGX committed a $2 billion investment in Binance — marking one of the biggest transactions in cryptocurrency history.

(Reported by Federico Maccioni Edited by Tomasz Janowski)