The UAE is seeking to launch a new digital currency backed by the dirham.

The holding company "ADQ", a sovereign wealth fund owned by the government of Abu Dhabi, along with Global Holding Company and First Abu Dhabi Bank, the largest banks in the UAE in terms of assets, announced on Monday their intention to launch a new stablecoin backed by the dirham as part of the UAE's efforts to enhance its investments in digital currencies. The three institutions stated in a press release that the stablecoin will fully comply with the regulatory rules of the Central Bank of the UAE and will be issued by First Abu Dhabi Bank upon regulatory approval. The statement added: "The stable digital currency will be adopted as a reliable payment method in a wide range of daily uses, whether by citizens and consumers or by companies and institutions." Stablecoins are digital tokens designed to maintain a fixed value backed by traditional currencies such as the US dollar. They have experienced rapid growth, serving as a means of payment or for transactions between parties looking to buy and sell outside the regulated banking system.