Source: Cointelegraph
Original: “Abu Dhabi Institutional Giants Team Up to Launch Dirham-Backed Stablecoin”
Three major institutions in Abu Dhabi, including the emirate's sovereign wealth fund, have teamed up to launch a new stablecoin pegged to the dirham.
Abu Dhabi sovereign wealth fund ADQ, the largest bank in the UAE, First Abu Dhabi Bank (FAB), and large corporate group International Holding Company (IHC) announced on April 28 that they have collaborated to launch the stablecoin, which is currently awaiting regulatory approval.
The three companies stated that the stablecoin will be regulated by the Central Bank of the UAE and will be backed by the national currency, the dirham. Additionally, it will support application scenarios including machine-to-machine communication (M2M) and artificial intelligence.
According to ADQ, the project aims to position the UAE at the "forefront of global blockchain innovation" while enhancing the country's digital infrastructure.
If approved by regulators, the new stablecoin will operate on the ADI blockchain created by the ADI Foundation. The ADI Foundation is a non-profit organization dedicated to assisting the existing financial system and government in advancing and adopting blockchain technology.
Founded in 2018, ADQ is a sovereign wealth fund focused on critical infrastructure and global supply chains. Meanwhile, IHC is one of the largest investment companies and diversified corporate groups in the UAE, with a market capitalization exceeding $243 billion, and is connected to the ruling family of Abu Dhabi. Abu Dhabi is the capital of the UAE.
FAB is the largest bank in the UAE, formed by the merger of First Gulf Bank and Abu Dhabi National Bank in 2017.
Countries Compete to Challenge the Dominance of Dollar-Backed Stablecoins
Other countries have also announced plans to launch stablecoins pegged to their national currencies to challenge the market dominance of dollar-backed stablecoins.
As of April, the market capitalization of dollar-pegged stablecoins has exceeded $230 billion, a 54% increase from last year. Among them, Tether (USDT) and USDC account for 90% of the market share.
After U.S. regulators and stablecoin issuer Tether froze wallets related to the sanctioned Russian crypto exchange Garantex, an official from the Russian Ministry of Finance proposed the idea of developing a national stablecoin.
However, investment banking giant Citigroup predicted in a report on April 23 that the supply of stablecoins will still be predominantly dollar-denominated, while non-U.S. countries are more likely to promote the development of their national currencies or central bank digital currencies (CBDCs).
Related: Samourai Wallet Requests Court to Extend Consideration Period for Dismissal of Crypto Mixer Case
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