Zand Bank Launches Regulated Stablecoin
Zand Bank, a digital banking institution leveraging artificial intelligence, has achieved a significant milestone by obtaining approval from the Central Bank of the UAE (CBUAE) to introduce Zand AED, a regulated stablecoin underpinned by the UAE dirham. This stablecoin initiative aims to enhance the dirham’s presence in the global digital economy by combining the reliability of a regulated banking framework with the rapidity and transparency afforded by blockchain technology.
Stablecoin Details and Oversight
Under the oversight of the CBUAE, Zand Trust, a subsidiary of Zand Bank PJSC, will issue the Zand AED stablecoin, which holds a commendable BBB+ rating by Fitch Ratings. This digital currency is designed to ensure complete redemption value as it is fully backed one-to-one by reserves of dirhams secured in regulated, segregated bank accounts. Its architecture promotes transparency through the use of smart contracts that are independently audited, ensuring continuous reserve attestations.
Significance of the Launch
Chairman Mohamed Alabbar expressed the significance of this launch not just for Zand Bank but for the UAE as a whole: “The introduction of an AED-backed stablecoin on public blockchains represents a pivotal moment for us. It positions our currency within the realm of digital finance and fortifies the UAE’s role as a pioneer in financial innovation.”
Facilitating Transactions and Innovation
Zand AED aims to facilitate rapid, borderless transactions across various public blockchains, providing an efficient platform for developers, businesses, and financial institutions worldwide to empower their operations.
Michael Chan, CEO of Zand, highlighted the broader ramifications of this development, stating, “Zand AED transcends the definition of a simple stablecoin. It offers a conduit for the UAE to merge traditional and decentralized financial systems, heralding a new era for payments, asset tokenization, and digital innovation—all underpinned by trust, regulatory clarity, and transparency.”
Future Outlook
With the global market for stablecoins projected to grow to $3 trillion in the near future, Zand AED positions the UAE as a key player in the evolving landscape of regulated digital finance, reinforcing its commitment to innovation.
