Abu Dhabi group creating dirham-backed stablecoin

Less risk than traditional crypto

Traded on ADI blockchain network

Sovereign wealth fund Abu Dhabi Developmental Holding Co. is among a group of companies developing a cryptocurrency that will be linked to the UAE dirham currency.

Better known as ADQ, the fund – together with the emirate’s International Holding Company (IHC) and First Abu Dhabi Bank (FAB) – will develop the stablecoin to be regulated by the UAE central bank, the three companies said in a joint press release this week.

Stablecoins are cryptocurrencies that are traded on blockchain networks, and their value pegged to real-world assets or fiat currencies, most often currencies like the US dollar. FAB will issue the stablecoin, the companies said.

In the UAE, “market maturity, regulation, security and oversight are rapidly evolving”, said Arushi Goel, Head of Policy Middle East & Africa at blockchain intelligence group, Chainalysis.

“Most major stablecoins are issued by centralised entities with the power to freeze funds and respond swiftly to law enforcement requests,” Goel told AGBI.

Stablecoins are often used for cross-border transactions, investments in tokenised assets, or to facilitate other crypto transactions with less of the risk of price fluctuation associated with traditional cryptos like Bitcoin.

ADQ was established in 2018 by the government of Abu Dhabi, and is the emirate’s third-largest sovereign wealth fund with assets of around $200 billion under management.

IHC, which the Sovereign Wealth Fund Institute ranks as number 16 in the world by value of assets, is an Abu Dhabi group led by Sheikh Tahnoon bin Zayed Al-Nahyan. 

He is the UAE’s national security adviser and brother to UAE President Sheikh Mohammed bin Zayed Al Nahyan.  

Investors in the UAE seem to prefer stablecoins over other types of cryptocurrencies. 

Bitcoin, the first decentralised cryptocurrency when it was invented in 2008, accounts for less than one fifth of the volume of cryptocurrencies received in the UAE. The share of stablecoins is about half, according to data from cryptocurrency research company Chainalysis.

The UAE dirham-pegged stablecoin will operate on the ADI blockchain network, which was developed in the UAE by the ADI Foundation. The dirham is pegged to the US dollar.

Abu Dhabi is the fifth most crypto-friendly city in the world, according to Multipolitan’s Crypto Friendly Cities Index 2025. 

The city ranks highly on such metrics including the regulatory environment, tax regime, lifestyle, and digital and cryptocurrency infrastructure.

Abu Dhabi is both a city and an emirate, and the wealthiest emirate and primary oil producer in the seven-member UAE federation.

Muscat in Oman, Doha in Qatar and Riyadh in Saudi Arabia also feature in the top 20, but Abu Dhabi is the highest among them, according to Multipolitan.

The wider UAE ranks 16th globally in Multipolitan’s Crypto Wealth Concentration Index, with Emirati wallets holding coins worth an average of $28,231.

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