Sonic Labs Drops Its US Dollar Stablecoin Initiative to Focus on Developing a Stablecoin Linked to the United Arab Emirates Dirham

Sonic Labs revealed its business shift on March 28, 2025 which coincides with the UAE's forthcoming digital dirham launch in late 2025.

Crypto technology firm Sonic Labs has dropped its U.S. dollar stablecoin initiative and is now focusing on developing a stablecoin pegged to the United Arab Emirates dirham.

The firm disclosed this business shift on March 28, 2025, which coincides with the UAE’s forthcoming digital dirham launch in late 2025.

Co-founder Andre Cronje confirmed this pivot on X, attributing it to the difficulties in navigating U.S. regulatory complexities.

This strategic maneuver showcases how cryptocurrency organizations are adapting their operations in response to changes in financial law enforcement throughout the world.

A week prior, Cronje unveiled plans for a USD-based stablecoin featuring an annual percentage rate ranging from 19% to 23%. However, he quickly reversed course, stating, “We will no longer be releasing a USD-based algorithmic stablecoin.” Instead, Sonic Labs will introduce a “mathematically bound numerical Dirham” settled and denominated in USD.

This pivot comes amid the UAE’s initiative to launch its own blockchain-based central bank digital currency (CBDC).

Its Close Link to UAE’s Digital Dirham

Governor Khaled Mohamed Balama of the UAE’s Central Bank plans to launch its digital dirham currency during the fourth quarter of 2025. According to the Khaleej Times, the director of the Central Bank of the UAE explained how the blockchain-powered currency strengthens financial stability and tackles financial crimes.

To extend its reach, the digital dirham will operate parallel with physical cash in every payment channel. This development has prompted companies like Sonic Labs to align their offerings with the UAE’s progressive stance on digital finance.

Furthermore, Sonic Labs decided to enter the stablecoin market in response to UAE stablecoin regulation for 2024 which allows AED-backed stablecoins to be accepted as payment methods for goods and services. The authority at the Central Bank restricts algorithmic stablecoins while letting firms create innovative solutions. Tether and Zand Digital Bank joined the expansion of dirham-based stablecoin options in the region, highlighting a positive trend for digital currencies that use the dirham currency.

U.S. Regulatory Obstacles

The transition from USD-based algorithmic stablecoins comes amid heightened regulatory scrutiny in the United States and Europe.

Lawmakers in the U.S. are still working on the STABLE Act legislation, which would place a two-year moratorium on algorithmic stablecoins and require issuers to maintain 1:1 reserve ratios.

Meanwhile, the European Union has introduced the Markets in Cryptoassets (MiCA) regulations, which could ban certain types of stablecoin models following the collapse of Terra, which wiped out billions of dollars in 2022.

To avoid these regulatory hurdles, Sonic Labs is adopting a different strategy with its new initiative. Cronje is pivoting from his previous plans to create a U.S.-dollar-linked stablecoin. Instead, he announced that the firm will be focusing on developing a numerical dirham.

This shift in focus comes in response to the difficulties encountered in navigating the complexities of U.S. regulatory requirements.

As a result of this pivot, Sonic Labs will now be concentrating its efforts on developing a dirham-linked stablecoin. This initiative is being undertaken in close collaboration with the UAE, which is currently engaged in launching its own digital dirham.