UAE Central Bank Approves DDSC Dirham Stablecoin

The Central Bank of the United Arab Emirates has officially approved the launch of a new dirham-backed stablecoin known as DDSC, marking a major milestone in the country’s rapidly evolving regulated digital finance ecosystem. The approval allows DDSC to operate on the ADI blockchain network, positioning the UAE at the forefront of integrating blockchain innovation with traditional financial infrastructure.

The initiative is the result of a strategic collaboration between three prominent UAE entities — International Holding Company (IHC), Sirius International Holding (a subsidiary of IHC), and First Abu Dhabi Bank (FAB). Together, these institutions aim to bridge conventional banking systems with secure, compliant blockchain technology.

Industry observers view the move as one of the most significant developments in the UAE’s digital asset strategy to date. It reflects the country’s broader ambition to become a global hub for regulated digital finance, fintech innovation and next-generation payment infrastructure.

What Is DDSC and Why It Matters

DDSC is a dirham-pegged stablecoin, meaning each digital token is backed 1:1 by the UAE dirham. Unlike highly volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins are designed to maintain a steady value by linking their worth to a fiat currency or reserve asset.

This stability makes DDSC particularly suitable for institutional finance, payments, settlements and treasury operations, where price predictability is essential.

Key features of DDSC include:

• 1:1 backing with the UAE dirham

• Designed for regulated financial use

• Institutional-grade security and compliance

• Integration with banking infrastructure

• Support for programmable financial services

The Central Bank’s approval signals strong regulatory confidence in the stablecoin model and reinforces the UAE’s commitment to building a safe, transparent and supervised digital asset ecosystem.

Strategic Importance for the UAE Financial System

The approval of DDSC is more than just a fintech milestone — it represents a structural shift in how digital money could operate within the UAE’s regulated financial environment.

The stablecoin is expected to help:

• Modernise payment infrastructure

• Reduce settlement times

• Improve cross-border transaction efficiency

• Enable programmable financial workflows

• Support the UAE’s digital economy ambitions

By formally approving a dirham-backed stablecoin, the Central Bank is signalling that regulated digital currencies can coexist with traditional banking systems under proper oversight.

This approach distinguishes the UAE from jurisdictions that have taken a more cautious or restrictive stance on stablecoins.

Who Is Behind the DDSC Project

The DDSC initiative is backed by a powerful consortium of UAE financial and technology players, each bringing distinct capabilities to the project.

International Holding Company (IHC)

International Holding Company is one of Abu Dhabi’s largest and most influential investment groups. The firm originally announced the stablecoin initiative in partnership with First Abu Dhabi Bank.

IHC’s involvement provides:

• Strategic investment strength

• Institutional credibility

• Access to a broad corporate ecosystem

• Long-term development support

The company has increasingly positioned itself as a major player in emerging technologies, including digital assets and AI-driven finance.

Sirius International Holding

Sirius International Holding, the technology arm of IHC, will play a central role in technical deployment, ecosystem integration and institutional adoption of DDSC.

Its responsibilities include:

• Blockchain integration

• Platform development

• Enterprise onboarding

• Digital finance innovation

Sirius is expected to help accelerate the practical rollout of DDSC across financial institutions, government use cases and large corporate environments.

First Abu Dhabi Bank (FAB)

First Abu Dhabi Bank the UAE’s largest bank by assets is a critical pillar of the project. FAB will facilitate the flow of the stablecoin through regulated financial services channels once DDSC becomes fully operational.

FAB’s participation is particularly significant because it:

• Anchors the stablecoin within the traditional banking system

• Provides institutional trust

• Enables regulated customer access

• Strengthens liquidity management

The involvement of the country’s largest bank underscores that DDSC is designed primarily for serious financial infrastructure use, not speculative crypto trading.

How DDSC Works on the ADI Chain

The DDSC stablecoin will be issued and operated on the ADI Chain, an institutional Layer-2 blockchain developed in the UAE by the ADI Foundation.

What is the ADI Chain?

ADI Chain is purpose-built to:

• Bridge traditional finance and blockchain

• Support regulatory compliance

• Deliver high transaction throughput

• Enable institutional participation

• Maintain strong security standards

As a Layer-2 solution, the network is designed for scalability and efficiency, allowing large transaction volumes while maintaining oversight mechanisms required by regulators.

Why the Blockchain Architecture Matters

The choice of ADI Chain is strategic. Many public blockchains prioritise decentralisation but struggle with regulatory compliance and institutional requirements. ADI Chain aims to solve this gap.

Its architecture enables:

• Controlled access for regulated entities

• Transparent audit trails

• Faster settlement speeds

• Lower transaction costs

• Integration with banking systems

This infrastructure makes DDSC suitable for banks, government entities, corporates and regulated financial institutions, rather than just retail crypto users.

Key Use Cases for the DDSC Stablecoin

The UAE authorities and project partners have outlined a wide range of high-value financial applications for DDSC within the country’s digital economy.

1. Payments and Collections

DDSC is expected to enable instant, secure digital payments, potentially replacing slower legacy systems in certain institutional contexts.

Benefits include:

• Near-real-time settlement

• Reduced transaction friction

• Improved cash-flow management

• Enhanced transparency

This could be particularly valuable for large corporates and government payment ecosystems.

2. High-Value Financial Settlements

One of the most important use cases is institutional settlement, including:

• Corporate treasury operations

• Interbank transfers

• Trade finance settlements

• Capital market transactions

Stablecoins can significantly reduce the time and cost associated with traditional settlement rails, which often rely on batch processing and multiple intermediaries.

3. Trade and Supply Chain Finance

DDSC is also positioned to support digital value transfer across logistics and trade networks, an area where the UAE is already a global leader.

Potential applications include:

• Cross-border trade settlement

• Supply chain payments

• Logistics financing

• Customs and duty payments

Given the UAE’s role as a major global trade hub, this use case could be particularly transformative.

4. Programmable Financial Services

One of the most forward-looking aspects of DDSC is its compatibility with programmable finance.

This enables:

• Automated treasury workflows

• Smart contract-based payments

• Conditional settlements

• Machine-to-machine transactions

Such capabilities are expected to play a key role in the next generation of digital financial infrastructure.

Alignment With UAE’s Digital Currency Strategy

The approval of DDSC is closely aligned with the UAE Central Bank’s broader Digital Currency Strategy, launched in 2023.

The strategy aims to:

• Modernise the financial system

• Explore central bank digital currency (CBDC) frameworks

• Support fintech innovation

• Strengthen payment efficiency

• Maintain regulatory oversight

By approving a regulated stablecoin, the Central Bank is effectively testing the waters of programmable digital money within a controlled environment.

Why Stablecoins Are Gaining Regulatory Support

Globally, regulators are increasingly recognising that properly backed and supervised stablecoins can offer meaningful benefits to financial systems.

Advantages include:

• Faster settlement times

• Lower transaction costs

• Greater transparency

• Improved liquidity management

• Support for digital commerce

However, authorities remain cautious due to risks around reserves, governance and financial stability. The UAE’s approach emphasises strict compliance and institutional oversight, which may serve as a model for other jurisdictions.

Expert Perspectives on the DDSC Approval

Senior executives involved in the project have described the Central Bank’s approval as a turning point for the UAE’s digital finance ambitions.

Key themes highlighted include:

• DDSC as a “defining milestone” in digital finance

• Proof that stablecoins can operate within regulated frameworks

• Potential to modernise payment and settlement infrastructure

• Acceleration of institutional blockchain adoption

Financial analysts note that the involvement of major institutions like IHC and FAB significantly boosts market confidence in the initiative.

Potential Impact on the UAE Fintech Ecosystem

The launch of DDSC could have ripple effects across the UAE’s rapidly growing fintech landscape.

Expected benefits include:

• Increased blockchain adoption

• Growth in regulated digital assets

• Expansion of fintech innovation

• Attraction of global investment

• Strengthening of Abu Dhabi’s financial hub status

If successfully implemented, DDSC could become a foundational layer for future digital financial products in the region.

Global Positioning: UAE Among Digital Finance Leaders

With this move, the UAE joins a select group of forward-looking financial jurisdictions actively integrating stablecoins into regulated finance.

Countries around the world are exploring digital currencies, but relatively few have:

• Approved regulated stablecoins

• Integrated them with major banks

• Built dedicated institutional blockchain rails

The UAE’s coordinated approach combining regulation, banking participation and blockchain infrastructure may give it a competitive advantage in the global digital finance race.

Conclusion

The Central Bank of the UAE’s approval of the DDSC dirham-backed stablecoin on the ADI Chain marks a pivotal step in the evolution of regulated digital finance in the country. Backed by major institutional players and built on compliant blockchain infrastructure, DDSC represents a carefully structured bridge between traditional banking and next-generation digital money.

As the stablecoin moves toward full operational rollout, it is expected to support faster payments, more efficient settlements and advanced programmable financial services across the UAE’s economy. More broadly, the initiative reinforces the country’s ambition to position itself as a global leader in fintech innovation and digital asset regulation.

If successfully adopted at scale, DDSC could become a cornerstone of the UAE’s future financial architecture demonstrating how stablecoins can function safely within a fully regulated environment while unlocking the efficiency and innovation benefits of blockchain technology.