UAE Central Bank approves dirham stablecoin for retail use - Digital Watch Observatory — 2026-07-06

## Short Segments UAE's Central Bank gives the green light to a dirham-backed stablecoin for retail use, marking a significant shift in the region's digital currency landscape. In today's episode, we'll explore how AX Coin is partnering with Bank of Bahrain and Kuwait to advance stablecoin infrastructure, Bridge's expansion across the EU with new licenses, and Ripple's full MiCA authorization for crypto services. We'll also look at the surge in euro stablecoins post-MiCA and a new partnership boosting stablecoin payments in APAC. But first, let's dive into AX Coin's latest move. AX Coin partners with Bank of Bahrain and Kuwait to advance stablecoin infrastructure. AX Coin, a subsidiary of SOLOWIN HOLDINGS, has signed a Memorandum of Understanding with the Bank of Bahrain and Kuwait to explore regulated stablecoin infrastructure for institutional banking. This partnership aims to develop a framework supporting institutional payments, treasury operations, and cross-border settlements. As stablecoins continue to gain traction, this collaboration could pave the way for more robust and regulated digital asset ecosystems in the region. For AX Coin, this move represents a strategic step in bridging traditional and digital finance, potentially enhancing the efficiency and security of financial transactions. The partnership highlights the growing interest in stablecoins as a viable solution for modern banking needs, especially in regions looking to integrate digital assets into their financial systems. SOLOWIN HOLDINGS' AX Coin and BBK sign MOU to explore stablecoin infrastructure in Bahrain. In a parallel development, SOLOWIN HOLDINGS' AX Coin has also signed an MOU with the Bank of Bahrain and Kuwait to explore stablecoin infrastructure. This agreement underscores the increasing momentum behind stablecoins in the Middle East, as financial institutions seek to leverage digital currencies for enhanced operational efficiency. The collaboration aims to create a regulated environment for stablecoin use, which could significantly impact institutional banking by providing a secure and efficient means of conducting transactions. As the regulatory landscape evolves, partnerships like this are crucial for establishing trust and compliance in the digital asset space. Bridge secures MiCA and EMI licenses for full EU expansion. Bridge, a stablecoin infrastructure company owned by Stripe, has obtained both a Markets in Crypto-Assets (MiCA) authorization and an Electronic Money Institution (EMI) license in Luxembourg. These dual approvals allow Bridge to offer regulated stablecoin services across all 27 EU member states. This development is significant as it provides a unified regulatory framework for stablecoin issuance and euro-denominated payment services, potentially increasing adoption and integration of digital assets in the European financial system. For businesses, this means more opportunities to leverage stablecoins for cross-border transactions and financial operations within a compliant and secure environment. Ripple secures full MiCA CASP authorization for crypto services across 30 EEA countries. Ripple has achieved full MiCA Crypto-Asset Service Provider authorization from Luxembourg, enabling it to offer regulated crypto services across all 30 European Economic Area countries. This authorization marks Ripple as fully compliant under the EU's Markets in Crypto-Assets Regulation, positioning it as a key player in the European digital asset market. For Ripple, this means expanded opportunities to provide payment solutions and financial services to a broader audience, reinforcing its commitment to regulatory compliance and innovation in the crypto space. MiCA euro stablecoins surge post-transitional period. The euro stablecoin market has experienced significant growth following the end of the EU's MiCA transitional period. With regulatory clarity now in place, euro-denominated stablecoins have surged, reaching approximately $900 million in mid-2026. This growth reflects a consolidation of the market under MiCA, rather than a surge in retail adoption, highlighting the importance of compliance in the digital asset space. For issuers and financial institutions, this means a more stable and predictable environment for euro stablecoin operations, potentially driving further innovation and adoption in the sector. Digital business service TP and Singapore's dtcpay to jointly boost stablecoin payment across APAC. TP, a global digital business services company, has partnered with Singapore-based dtcpay to enhance stablecoin payment services across the Asia-Pacific region. This collaboration aims to provide 24/7 multilingual support, leveraging TP's AI-powered customer experience platform to improve productivity and operational efficiency. For dtcpay, this partnership represents an opportunity to expand its stablecoin-enabled payment offerings, potentially increasing adoption and integration of digital payments in the APAC region. As stablecoins continue to gain traction, such partnerships are crucial for scaling operations and meeting the growing demand for digital payment solutions. ## Feature Story UAE Central Bank approves dirham stablecoin for retail use, signaling a new era for digital currency in the region. The UAE Central Bank has granted a no-objection certificate to the DDSC, a dirham-backed stablecoin, allowing it to be used for retail transactions on regulated exchange platforms. Developed by Abu Dhabi’s International Holding Company, First Abu Dhabi Bank, and Sirius International Holding, DDSC aims to challenge the dominance of U.S. dollar stablecoins by offering a 1-to-1 dirham peg. This approval marks a significant milestone in the rollout of DDSC, paving the way for broader adoption of a regulated UAE dirham-backed digital currency. The move comes as part of the UAE's broader strategy to integrate digital currencies into its financial system, providing consumers with easier access to digital transactions. By allowing DDSC to operate on platforms regulated by the Virtual Assets Regulatory Authority (VARA), the UAE is positioning itself as a leader in the digital currency space, offering a secure and compliant environment for stablecoin use. This development is expected to boost consumer confidence and drive the adoption of digital currencies for everyday transactions. For issuers and financial institutions, the approval of DDSC represents a new opportunity to engage with digital assets in a regulated manner. The stablecoin's institutional-scale capabilities, demonstrated by over Dh150 million transacted to date, showcase its scalability and operational readiness. As the UAE continues to embrace digital innovation, the introduction of a dirham-backed stablecoin could set a precedent for other countries looking to integrate digital currencies into their financial ecosystems. Looking ahead, the success of DDSC could influence the global stablecoin market, encouraging other regions to explore similar initiatives. As digital currencies become more mainstream, the regulatory frameworks established by pioneering countries like the UAE will play a crucial role in shaping the future of digital finance. For now, the approval of DDSC marks a significant step forward in the UAE's digital currency journey, offering a glimpse into the potential of stablecoins to transform the financial landscape.