The UAE stablecoin market is growing around a regulated structure that combines dollar-backed tokens with dirham-denominated digital money. Arthur D. Little, a global management consultancy company, identifies the country as the Gulf’s leading example of what it calls “replication, not resistance.”
Under this approach, governments can permit regulated global stablecoins while developing sovereign-aligned alternatives for local use. The strategy follows the UAE’s 2024 framework for fiat-referenced tokens and the February 2026 launch of DDSC.
Arthur D. Little says the UAE’s strategy separates payment functions rather than requiring one form of digital money to replace another.
Dollar-backed stablecoins can continue serving international and cross-border activity. Meanwhile, a regulated dirham layer can support domestic transactions and potentially regional payments.
DDSC, backed by International Holding Company, Sirius International Holding and First Abu Dhabi Bank, launched with the Central Bank of the UAE approval. Within three months, the dirham-backed stablecoin completed a $30 million institutional transaction.
The shift comes as dollar-backed tokens continue to dominate the wider market. They represent about 97% of the roughly $312 billion fiat-backed stablecoin market. However, demand for other currencies has expanded. Unique holders of non-USD stablecoins increased by 2,900% between January 2023 and February 2026, reaching 1.2M.
(adsbygoogle = window.adsbygoogle || []).push({});The report says Gulf economies have a structural advantage because their currencies are pegged to the U.S. dollar. Local-currency stablecoins could therefore combine dollar-linked stability with domestic regulatory oversight and locally held reserves.
Arthur D. Little identifies trade, remittances, and cross-border payments as areas where regional infrastructure could be developed. That includes intra-GCC flows and corridors connecting the Gulf with Africa and South Asia.
Sub-Saharan Africa recorded more than $56 billion in on-chain stablecoin transfers between the first quarters of 2024 and 2025. Dollar-denominated infrastructure currently handles most of those flows. The report estimates a 24- to 36-month window before regional activity consolidates around sovereign-aligned or dollar rails.
For banks and payment providers, the changing structure creates options about which currencies, customers, payment layers, and corridors they intend to serve. Meanwhile, policymakers face questions about interoperability and mutual recognition as regulated stablecoin systems expand across jurisdictions.
