UAE BARQ برق الإمارات – نبضك
The UAE is emerging as a regional template for a new era of regulated digital money, as governments increasingly respond to the rise of US dollar-backed stablecoins by developing sovereign-aligned alternatives rather than resisting their adoption, according to a new Viewpoint from global management consultancy Arthur D. Little.
“The Sovereign Stablecoin Era: Replication, Not Resistance” finds that a fundamental shift is taking place in the global stablecoin landscape. Instead of choosing between allowing dollar stablecoins to proliferate or restricting them, a growing number of jurisdictions are pursuing a third path: permitting regulated global stablecoins while developing local-currency alternatives.
The report identifies the UAE as the leading regional example of this emerging model. Following the establishment of the Middle East’s first comprehensive regulatory framework for fiat-referenced tokens in 2024, the country has seen regulated dollar-backed stablecoins develop alongside a dirham-denominated layer, including the launch of DDSC, backed by International Holding Company, Sirius International Holding and First Abu Dhabi Bank.
This represents a deliberate two-layer strategy: enabling regulated dollar stablecoins to support international and cross-border activity while developing dirham-denominated infrastructure for domestic and potentially regional use.
Commenting on the significance of the UAE’s approach, Arjun Vir Singh, Partner and Global Head of Fintech, Payments & Digital Assets at Arthur D. Little, and co-author of the Viewpoint, said: “The UAE is demonstrating that dollar stablecoins and a domestic digital currency ecosystem do not have to be competing choices. Global instruments can continue to serve international flows, while a regulated dirham layer can support domestic and regional activity. This positions the UAE not simply as an adopter of digital finance, but as a market helping define how regulated digital money can coexist across different layers of the financial system.”
Looking at what this shift means for financial institutions and payment providers, Dr. Mohammad Nikkar, Principal, Financial Services practice, Arthur D. Little, Middle East, and co-author of the Viewpoint, highlighted the opportunity emerging at the regional level: “For banks and payment players, the question is no longer simply whether to participate in stablecoins. It is which currency, which payment layer, which client and which corridor they want to serve.
The regional layer remains particularly open, creating an opportunity for the UAE and wider GCC to shape how value moves across some of the world’s most important trade corridors.”
