Key Takeaways
- Zand Bank received approval from the UAE Central Bank to issue the country’s first AED-backed stablecoin on public blockchains.
- The stablecoin, Zand AED, is fully backed by dirham reserves, held in segregated, regulated accounts, and supported by audited smart contracts.
- The token is issued by Zand Trust and is positioned as an on-chain form of the dirham for cross-border settlement and digital financial infrastructure.
- Zand executives say the launch marks a step toward integrating the national currency with decentralized finance and expanding the UAE’s digital payments ecosystem.
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Zand Bank has secured approval from the Central Bank of the United Arab Emirates to introduce the country’s first AED-backed stablecoin on public blockchain networks.
According to a press release received by TimesCrypto, the stablecoin, known as Zand AED, will operate across several public blockchains. It is supported by independently audited smart contracts and reserve attestations, with reserves held in segregated regulated accounts to ensure full redemption value.
The token is fully backed by dirham reserves and issued by Zand Trust, a wholly owned subsidiary of Zand Bank PJSC. Zand positions the asset as an on-chain representation of the dirham intended for cross-border settlement, enterprise integrations and blockchain-based financial services.
Emphasizing the impact of the launch, Mohamed Alabbar, Chairman of Zand, said:
“Launching an AED-backed stablecoin on public blockchains is not simply a milestone for Zand. It is a breakthrough for the UAE.”
He noted that the approval also signals a broader shift in the UAE’s digital strategy:
“This initiative carries our national currency into the digital future and reinforces the UAE’s position as a global leader in financial innovation.”
“Zand AED is more than a stablecoin. It is the UAE’s bridge between traditional finance and decentralized finance. It unlocks the next generation of payments, tokenization, and digital asset innovation. All of it is built on trust, transparency, and regulatory clarity,” said Michael Chan, CEO of Zand, highlighting the token’s role in reshaping digital payments.
UAE’s Digital Dirham Initiative Advances Alongside Zand’s Regulated Stablecoin Launch
The launch comes as the UAE advances its central bank digital currency program, a multi-year national effort to modernize payments and prepare the dirham for use across digital and cross-border financial systems.
According to the Central Bank’s policy paper, the Digital Dirham will function as a sovereign digital form of the national currency and be issued in both retail and wholesale formats. The project forms a core pillar of the Financial Infrastructure Transformation program, which aims to future-proof the country’s monetary system.
The Central Bank completed the first phase of development in early 2024, building the issuance platform, running retail pilots with licensed financial institutions, and processing a cross-border payment through the mBridge minimum viable product.
The work covered four digital economy use cases: fractional ownership of tokenised assets, a smart tourist wallet, programmable social benefit payments and parent-child sub-wallets, to evaluate how a CBDC could operate across private and government services.
The Digital Dirham will be distributed through an intermediated model, with licensed financial institutions and payment providers offering wallets to users while the Central Bank handles issuance and ledger validation. The CBDC will be non-interest-bearing, fully interchangeable with cash and bank deposits, and subject to holding limits designed to prevent deposit flight in periods of stress.
Technical safeguards include a permissioned distributed ledger, pseudonymity for users and embedded compliance controls.
Furthermore, cross-border applications form a major part of the strategy. The Central Bank is developing bilateral and multilateral arrangements to support international settlement, building on the mBridge platform, which is now the first operational multi-CBDC system globally, to improve the speed and cost of international transfers while preserving monetary sovereignty.
The UAE plans a phased rollout for both retail and wholesale versions of the Digital Dirham, with ongoing coordination between government entities, financial institutions and international partners.
For now, additional pilots, rulebooks and legal provisions are being developed ahead of broader public introduction.
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