UAE’s Zand Stablecoin Strengthens Digital Dirham’s Position in the International Fintech Arena

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UAE’s Zand Stablecoin Strengthens Digital Dirham’s Position in the International Fintech Arena

Bitget-RWA2025/11/19 06:46

By:Bitget-RWA

- UAE's Zand Bank launches Zand AED, a dirham-backed stablecoin fully reserved and regulated, becoming the second digital bank in the nation to offer such a product after Mbank's 2024 AE Coin. - The stablecoin's launch coincides with UAE's first government transaction using Digital Dirham CBDC, completed in under two minutes between Ministry of Finance and Dubai Department of Finance. - Zand AED operates under UAE Central Bank's strict regulatory framework requiring 100% high-quality asset backing and real

Zand Bank in the UAE has obtained regulatory clearance to introduce a stablecoin backed by the dirham, representing a notable advancement in the country's efforts to incorporate digital currencies into its financial system. The stablecoin, called Zand AED, is entirely supported by AED reserves on a one-to-one basis, held in separate, regulated accounts and

functions across several public blockchain networks

. With this launch, Zand becomes the UAE's second digital bank to provide a regulated stablecoin,

following the debut of Mbank's AE Coin in 2024

. The project, managed by Zand Trust—a fully owned subsidiary of Zand Bank—

seeks to connect conventional finance with decentralized platforms

while adhering to the regulatory framework set by the UAE Central Bank.

The release of the stablecoin aligns with the UAE's wider ambitions in digital finance. Just a few days earlier, the nation completed its inaugural government transaction using the Digital Dirham, its central bank digital currency (CBDC), through the mBridge platform

as reported

. This transaction, conducted between the Ministry of Finance and Dubai's Department of Finance, was completed in less than two minutes, highlighting the speed and efficiency of the UAE's developing digital infrastructure.

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, the UAE's Minister of Finance, described the event as

"a pivotal milestone in the history of government financial transformation," stressing its importance in improving transparency and operational effectiveness.

The introduction of Zand AED is in line with the UAE's commitment to clear regulations for digital assets.

Since March 2023, the Central Bank has required

that stablecoins be entirely backed by high-quality liquid assets and be subject to thorough audits. Zand AED's real-time transparency—enabled by independently audited smart contracts and reserve attestations—demonstrates this dedication.

Zand's Chairman, Mohamed Alabbar, referred to the stablecoin

as "a breakthrough for the UAE," strengthening the country's reputation as a pioneer in financial innovation. CEO Michael Chan noted that the stablecoin acts as a "bridge between traditional finance and decentralized finance,"

opening up new possibilities in tokenization and international payments

UAE’s Zand Stablecoin Strengthens Digital Dirham’s Position in the International Fintech Arena image 0

The timing of Zand's launch also brings attention to Tether's postponed AED-backed stablecoin, which was

previously being developed in partnership with Phoenix Group

. Despite the UAE's advancements in regulation,

Tether

has not yet received approval for its product, underscoring the competitive dynamics in the region's stablecoin sector. Meanwhile, the UAE's Digital Dirham CBDC pilot among government agencies—

expected to fully launch by 2025

reflects a broader initiative to digitize the national currency.

The government's adoption of the Digital Dirham highlights its significance as a foundational element in the UAE's digital economy. The Central Bank of the UAE's FIT Programme, which underpins this effort, is designed to accelerate digital payments across both public and private sectors.

Sheikh Mansour bin Zayed, chairman of the Central Bank, stressed

that the Digital Dirham serves as a "strategic pillar" in building a fully integrated digital economy.

The launches of Zand AED and the Digital Dirham pilot illustrate a dual strategy: utilizing blockchain for efficient cross-border transactions while maintaining strong regulatory controls. With Tether's absence and the rapid expansion of digital asset markets, the UAE's clear regulatory environment may encourage more institutional participation, positioning the country as a leader in next-generation financial infrastructure.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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