Consumers in the UAE now have easier access to use a UAE dirham-backed digital currency for everyday transactions.
DDSC, the UAE dirham-backed stablecoin developed by Abu Dhabi’s International Holding Company, First Abu Dhabi Bank and Sirius International Holding, has received approval to live on some exchange platforms regulated by the Virtual Assets Regulatory Authority (Vara).
The stablecoin received a no objection certificate from the UAE Central Bank for the move, which is aimed at boosting the adoption of digital assets, IHC said in a statement.
Getting on Vara-regulated platforms will make it easier for users to access, buy and redeem DDSC, IHC said. It can support everyday payments, such as shopping, business payments or transfer of funds between people, all denominated in dirhams and settled on-chain.
The move will also promote stablecoin adoption beyond institutional use.
Stablecoins provide an advantage over regular currencies since they are not tied to banking hours and any intermediary delays. Anyone with an internet connection can access, store, and transact stablecoins.
DDSC is pegged 1:1 to the UAE dirham and settles on ADI Chain, the institutional Layer2 blockchain developed by ADI Foundation.
Since its launch, “DDSC has demonstrated institutional-scale capabilities, with over Dh150 million ($41 million) transacted to date, showcasing the scalability, resilience and operational readiness of the ecosystem”, the statement added.
Stablecoins, which are pegged to a fiat currency, tend to be less volatile when compared to cryptocurrencies such as Bitcoin. They are tied to a currency, liquid reserves including government treasuries, or commodities such as precious metals.
Stablecoins could enable faster and cheaper payments, particularly across borders and for remittances, where traditional systems are often slow and costly, according to the International Monetary Fund.
They also help expand financial access. “Stablecoins could drive innovation by increasing competition with established payment service providers, making retail digital payments more accessible to underserved customers,” the fund said in a report last year.
IHC and FAB first announced the stablecoin initiative in April last year to simplify payments and bolster the country’s regulated digital assets infrastructure. It received UAE Central Bank approval in February this year.
In May, IHC also executed a Dh110 million transaction using DDSC on the ADI Chain blockchain network.
The transaction marked “one of the largest single stablecoin transactions” completed in the region, IHC said at the time.
“Following the successful demonstration of DDSC at institutional scale, this next phase expands its potential reach to businesses and individuals through selected Vara-regulated platforms, supporting faster, more efficient and fully regulated digital transactions in UAE dirhams,” said Syed Basar Shueb, chief executive of IHC.
The latest transaction ties into wider developments in the UAE’s digital-asset strategy. The country has been preparing regulatory frameworks for stablecoins and digital currencies.
Vara was set up in Dubai in March 2022 under the Dubai Virtual Asset Regulation Law, the first law in the emirate that regulates virtual assets. The body aims to establish an advanced legal framework to protect investors and provide international standards for the vifor the governance of the virtual asset industry responsible business growth in the emirate.
The Virtual Assets and Related Activities Regulations 2023 mandates “gold-standard risk assurance” and anti-money-laundering standards standards to be applied by licensed businesses within the emirate.
As a regulated UAE dirham-backed stablecoin, DDSC provides a local currency alternative to the predominantly US dollar-denominated stablecoins used across global digital asset markets, IHC said.