Sonic Labs Scraps USD Algorithmic Stablecoin Plans, Shifts Focus to UAE Dirham-Based Token

In Brief:

Sonic Labs cancels its dollar-pegged algorithmic stablecoin initiative.

The team will now develop a Dirham-based stablecoin settled in USD.

Sonic Labs has officially canceled its plans to launch a USD-pegged algorithmic stablecoin, opting instead to create a new stablecoin product tied to the United Arab Emirates Dirham (AED). The update was confirmed by co-founder Andre Cronje via the X platform.

“We will no longer issue a USD-pegged algorithmic stablecoin,” Cronje wrote, “but will instead issue an alternative related to the digital Dirham, which is settled in USD but absolutely not a USD-based algorithmic stablecoin.”

This decision marks a significant shift in Sonic Labs’ stablecoin strategy, likely influenced by regulatory caution and the broader skepticism surrounding USD-backed algorithmic models—especially following the collapse of projects like TerraUSD (UST).

The new direction aligns with ongoing developments in the UAE, where the central bank is expected to launch a digital Dirham CBDC by Q4 2025. Sonic Labs appears to be positioning itself as an early mover in this evolving digital finance landscape.

Further details about the mechanism, collateralization, or issuance model for the Dirham-linked stablecoin have not been released.

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