UAE’s digital asset strategy: Bridging AI, blockchain, and BRICS+

On March 19, Sheikh Tahnoon bin Zayed Al Nahyan, Deputy Ruler of Abu Dhabi and National Security Adviser, met with US President Donald Trump. During the meeting, the UAE committed to investing $1.4 trillion into the US economy, with a focus on artificial intelligence (AI) and advanced technology. The same day, Sheikh Tahnoon also engaged in a conversation with American entrepreneur Elon Musk, emphasizing that innovations could “reinforce the UAE’s position as a global leader in digital innovation.”

On March 21, the high-ranking official of the UAE, along with the White House AI and crypto czar David Sacks, explored “the transformative effects of artificial intelligence across various sectors, the expanding role of digital currencies in reshaping financial systems, and the investment opportunities emerging at their convergence.”

What do these intense communications signify? There is a clear and growing interest in cryptocurrencies within the UAE, fueled by global anticipation of a new wave of crypto development and positively influenced by the pro-crypto stance of Trump’s administration. Moreover, Abu Dhabi’s sovereign wealth fund, Mubadala, holds a stake in BlackRock’s iShares Bitcoin exchange-traded fund.

These developments followed news of Sheikh Tahnoon’s MGX — a key technology investment vehicle of the UAE — investing $2 billion into Binance, with the transaction conducted in stablecoins. While details on the specific stablecoins used remain unclear, the Central Bank of the UAE (CBUAE) approved the dirham-based AE Coin stablecoin in December 2024. Dirham-backed stablecoins like AE Coin are authorized for domestic transactions, including payments for goods and services within the UAE.

Under the CBUAE’s Payment Token Services Regulation (PTSR), any entity intending to issue stablecoins must submit a comprehensive white paper detailing the token’s structure, security measures, and operational framework. Once all formalities are completed, the entity must await approval of its application. This process ensures adherence to stringent standards regarding reserves, security, and transparency requirements.

The PTSR does not explicitly address cross-border transactions involving dirham-backed stablecoins. AE Coin’s approval framework prioritizes domestic adoption, though global interoperability is implied through partnerships with exchanges and decentralized platforms.

MGX’s deal with Binance and Sheikh Tahnoon’s US engagements suggest that the UAE aims to integrate AI, blockchain, and cryptocurrencies. The UAE joined BRICS+ on January 1, 2024, a bloc that promotes the use of national currencies in external trade. In the same month, the CBUAE revealed that Sheikh Mansour Bin Zayed Al Nahyan, Vice President and Chairman of the CBUAE, initiated the first cross-border payment of the ‘Digital Dirham’, the UAE’s central bank digital currency (CBDC), to China, amounting to AED 50 million via mBridge.

Thus, the UAE is well-positioned to leverage dirham-based digital assets — whether regulated stablecoins like AE Coin or CBDCs — for external trade. The country’s new legislation on dirham-based stablecoins highlights this potential. Meanwhile, MGX’s investment in Binance underscores its interest in blockchain infrastructure for digital assets.

The adoption of blockchain-based digital assets is a natural progression in leveraging distributed ledger technology (DLT). During my tenure leading ‘Otkritie Broker’, we integrated blockchain across all key processes. Its immutable data storage proved invaluable not only for internal communications but also for financial interactions with partners. Implementing blockchain technology reduced contractual processing times by an average of 70%. Through the Emirates Blockchain Strategy 2021 and the Dubai Blockchain Strategy, the UAE has actively encouraged businesses to adopt DLT — and now, the next step is approaching.

We see how blockchain-based digital assets not only disrupt traditional financial communications but also provide strategic advantages. As a BRICS+ member, the UAE is open to using national currencies in trade. At the same time, the AED’s peg to the USD helps mitigate potential US tensions — especially in light of threats of 100–150% tariffs on BRICS+ countries for challenging the dollar’s reserve status. The UAE holds significant leverage in its digital transformation, balancing BRICS+ trade opportunities with strengthened US ties and shared technological innovation.

In the investment world, a well-known saying is ‘Follow the money’. We’ve already seen this in action, with MGX making the largest institutional investment in the crypto sector. This signals that both local banks and foreign investors in the UAE and the broader Middle East should closely monitor startups operating at the intersection of traditional fintech, AI, and blockchain. They must be prepared for a surge in M&A activity in this space, which I see as only the beginning. All of this points to a future where blockchain-based digital assets will be central to global finance and the world economy.