UAE central bank licenses dirham-backed stablecoin

TLDR

The UAE has formally licensed a new dirham?backed stablecoin, DDSC, bringing it under full central bank oversight on Abu Dhabis ADI Chain.

1. Dirham-Backed Stablecoin (DDSC) is a 1:1 AED-pegged token on ADI Chain, initiated by International Holding Company (IHC) and First Abu Dhabi Bank (FAB) and licensed by the UAE central bank.
2. DDSC sits inside the UAEs Payment Token Services Regulation, which allows bank-led, fully reserved stablecoins and positions the country as an early mover in regulated digital payments.
3. The key variables now are real-world usage, integration with banks and payment providers, and how DDSC interplays with other UAE-regulated tokens like USD stablecoin USDU and future GCC currency tokens.

Deep Dive

1. What Was Licensed

The central bank has approved and licensed Dirham-Backed Stablecoin (DDSC), a token backed 1:1 by UAE dirham reserves and issued on ADI Chain, an institutional layer 2 blockchain run by the ADI Foundation under the ADGM framework.

DDSC was initiated by Abu Dhabis International Holding Company and First Abu Dhabi Bank, with FAB acting as banking partner and custodian of the fiat reserves, and is explicitly described as licensed by the UAE central bank for compliant settlement on ADI Chain.

This structure means DDSC is not a private offshore token but a regulated payment instrument integrated with domestic banking infrastructure, with audits and compliance frameworks in place on a public blockchain.

2. How It Fits UAEs Stablecoin Strategy

DDSC is one pillar in a wider UAE strategy built around the Payment Token Services Regulation, which became fully enforceable in 2025 and enables licensing of both foreign stablecoins and dirham-backed tokens inside the national regime.

Alongside DDSC, the central bank has also registered USDU as the first USD-backed Foreign Payment Token under this framework, making it the only USD stablecoin currently recognized for fully compliant settlement of digital-asset payments in the UAE.

This dual approach (local AED token plus regulated foreign USD token) aims to link international crypto liquidity with domestic rails while retaining central bank control over reserves, issuers, and how tokens are used in payments and derivatives.

3. What To Watch Next

The big test will be whether banks, fintechs, and corporates actually use DDSC for real payments, payroll, and cross-border remittances, especially given the UAEs heavy remittance flows and active crypto user base.

ADI Chain has already highlighted plans and MOUs around tokenized assets and remittances, and the roadmap for DDSC includes expansion to other GCC currencies and connections into Africa, which could create a regional network of bank-backed stablecoins.

Also important is how DDSC interacts with other dirham tokens such as AE Coin and bank-issued AEDZ, and whether they converge into a common standard or fragment liquidity across multiple official AED stablecoins.

Conclusion

A dirham-backed stablecoin licensed by the UAE central bank marks a shift from experimental pilots to fully regulated, bank-integrated stablecoin infrastructure in a major crypto hub.

If DDSC gains real transaction volume and interoperates smoothly with USD token USDU and other regional rails, it could make the UAE one of the most advanced live testbeds for regulated stablecoin payments in both retail and institutional markets.