UAE Central Bank Approves Dirham-Backed DDSC Stablecoin on ADI Chain

{getToc} $title={Table of Contents}

Digital Dirham breakthrough: IHC and FAB launch licensed DDSC stablecoin to bridge traditional finance with ADI Chain.

Central Bank of the UAE has licensed DDSC, a dirham-backed stablecoin operating exclusively on ADI Chain's institutional blockchain infrastructure.
DDSC is backed 1:1 by UAE dirham reserves held at First Abu Dhabi Bank and designed for institutional payments, treasury management and cross-border settlement.
International Holding Company (market cap approximately $240 billion) and FAB (assets over $330 billion) initiated the project with support from Sirius International Holding.
The stablecoin addresses more than $70 billion in annual digital payment flows and nearly $50 billion in cross-border remittances processed by the UAE.
ADI Chain provides compliance-ready Layer-2 infrastructure with built-in KYC and AML safeguards, enabling 24/7 settlement for regulated entities.
The roadmap envisions expansion to other GCC currencies, African payment rails including M-Pesa integration, and interoperable settlement across MENA, Africa and Asia.

CBUAE Regulatory Approval Marks National Digital Finance Milestone

The Central Bank of the UAE (CBUAE) has granted formal approval for DDSC, positioning it as one of the first fully regulated, dirham-backed stablecoins aligned with the UAE's federal regulatory framework. The licensing milestone demonstrates that national stablecoins can operate on blockchain infrastructure while meeting rigorous risk and compliance standards set by the central bank. First Abu Dhabi Bank (FAB), the UAE's largest bank with more than $330 billion in assets, serves as the banking and custody partner for the underlying fiat reserves.

International Holding Company (IHC), one of the world's largest investment companies, initiated the DDSC project alongside FAB, with technology subsidiary Sirius International Holding supporting deployment and institutional adoption. The stablecoin operates exclusively on ADI Chain, a Layer-2 blockchain infrastructure developed by the Abu Dhabi-based ADI Foundation and designed specifically for institutional-grade digital asset settlement. The approval positions the UAE as a testbed for regulated tokenised money solutions that capture efficiency gains while maintaining central bank oversight.

Full Reserve Backing and Institutional Architecture

DDSC is backed 1:1 by UAE dirham reserves held at FAB, meaning each token in circulation is fully collateralised by an equivalent amount of fiat AED. The token functions as a compliant digital settlement instrument rather than a speculative crypto asset, designed for institutional and government-led use cases including payments, high-value settlement, treasury management, and trade and supply-chain flows. The governance model separates roles across entities: IHC and FAB act as project initiators, Sirius supports technology integration, DDSC serves as token distributor and issuer, FAB provides banking and custody services, ADI Chain delivers blockchain infrastructure, and CBUAE functions as licensing and supervisory authority.

FAB's role connects more than 4 million customers across 20-plus markets to programmable blockchain rails, leveraging established banking infrastructure to back the digital token. The stablecoin will be made available to FAB's institutional and enterprise clients through approved platforms, with an initial focus on institutional and government-grade use cases rather than retail trading. Syed Basar Shueb, CEO of IHC, stated that DDSC marks a defining milestone in the UAE's digital finance journey, delivering trusted, institutional-grade infrastructure that strengthens resilience and accelerates innovation in regulated digital payments.

ADI Chain Infrastructure and Compliance Framework

ADI Chain is characterised as the first institutional Layer-2 blockchain in the MENA region dedicated to stablecoins and real-world assets, with design priorities centred on compliance, efficiency and security. The infrastructure is described as compliance-ready, with support for know-your-customer (KYC), anti-money-laundering (AML) and other regulatory safeguards that align operations with supervisory expectations. When DDSC is transferred for payments, settlements or cross-border remittances, the chain's utility token (ADI) handles transaction processing and gas fees.

Futoon Hamdan AlMazrouei, Group Head of Personal, Business, Wealth and Privileged Client Banking Group at FAB, emphasised that the milestone underscores that stablecoins can be integrated responsibly into the financial system when built to meet rigorous regulatory and risk requirements. The network provides 24/7 instant settlement and automated value transfer, integrating programmable blockchain rails directly with existing banking infrastructure. ADI Chain operates as a semi-public environment rather than on permissionless chains such as Ethereum or Solana, enabling regulated entities to transact on-chain without compromising regulatory oversight or risk controls.

Market Context and Settlement Flows

Industry data cited in coverage of the launch notes that the UAE processes more than $70 billion in digital payment transaction value annually, in addition to nearly $50 billion in cross-border remittance flows and substantial trade volumes across the MENA-Asia-Africa corridors. DDSC is positioned as a compliant settlement rail to service these flows, competing for institutional settlement activity with other AED-linked tokens in the market including AE Coin and Zand AED. Analysts describe DDSC as the fourth federally aligned dirham stablecoin within an estimated $300 billion global stablecoin market.

The launch coincides with broader digital transformation initiatives in the UAE, including work on a domestic central bank digital currency (CBDC), cross-border CBDC trials with other central banks, and regulatory frameworks for virtual asset service providers. Some commentators view DDSC as a flow test for how a tokenised dirham might function in real-world settlement scenarios, offering a bridge between the banking sector and future digital dirham projects. The project moved from initial announcement in April 2025 through design and pilot phases into operational deployment following CBUAE authorisation.

Regional Expansion and Strategic Roadmap

The partners outline a staged roadmap: first, demonstrate the model using the UAE's national currency; second, extend similar institution-backed stablecoins to other Gulf Cooperation Council (GCC) currencies; third, connect to African payment rails including potential integration with mobile money networks such as M-Pesa; and finally, enable interoperable settlement across markets in MENA, Africa and Asia. The ultimate goal is to build a network of interoperable, institution-backed regional stablecoins all operating on ADI Chain's compliance-ready settlement layer.

DDSC is framed as a core component of the UAE's digital asset and fintech ecosystem rather than a retail crypto trading product, with emphasis on corporate payments, institutional treasury operations, government disbursements and collections, trade finance, and programmable financial services that can be automated via smart contracts. By focusing on high-value, business-to-business and government-to-business flows and requiring counterparties to operate through regulated platforms, DDSC is expected to face different adoption dynamics than consumer-oriented stablecoins such as USDT and USDC. Media reporting indicates the stablecoin has entered operational deployment with select institutional participants, even as broad public access remains limited in the initial phase.