Abu Dhabi giant IHC abandons building its own public chain and shifts to Ethereum Layer 2 to develop institutional-grade blockchain infrastructure.

The capital of the United Arab Emirates, Abu Dhabi, has once again made a major announcement in the blockchain industry. The UAE’s largest corporate group with a market value exceeding $240 billion — International Holding Company (IHC) — officially announced the abandonment of its original plan to develop its own Layer 1 blockchain, opting instead for an Ethereum-based Layer 2 solution. This shift was driven actively by the Ethereum developer community — especially the Lambda Class team. For the global blockchain industry, this move not only signifies institutional trust in Ethereum Layer 2 solutions but also marks an important step toward the Middle East region becoming a “blockchain financial center.”

Embracing Layer 2: Security, Scalability, and Market Trust as Key Factors

According to Ethereum core contributor Federico Carrone, IHC initially intended to develop an independent Layer 1 public chain, but after in-depth analysis, they deemed the risks too high. In contrast, Layer 2 solutions built on the Ethereum mainnet offer higher security and mature infrastructure, while avoiding common single points of failure associated with independent public chains.

Ultimately, IHC chose to collaborate with its subsidiaries Sirius International Holding and ADI Foundation to deploy a new platform called ADI Chain using Ethereum Layer 2 technology, tailored specifically for institutional applications.

Key Partnership Announcements: BlackRock, Mastercard, and Central Banks Involved

This shift to Ethereum Layer 2 also enables IHC to rapidly advance a series of cooperation plans related to real-world asset tokenization (RWA) and stablecoin payments, including:

BlackRock and Franklin Templeton: Exploring how to issue and trade tokenized assets via ADI Chain.

Mastercard: Promoting stablecoin payment solutions in the Middle East, including cross-border remittances and B2B commercial payment innovations.

UAE Central Bank Regulation: ADI Chain will serve as the settlement layer for future collaborations with First Abu Dhabi Bank (FAB) and the national fund ADQ for the “Dirham Stablecoin.” This stablecoin will be regulated and planned for use in local and global payments, strengthening the UAE’s position in financial technology.

ADI Chain Focuses on Compliance and Regional Expansion, Targeting One Billion Users

Built on ZKsync technology stack, ADI Chain emphasizes government-level infrastructure, security, and compliance architecture. The mainnet is now officially online, attracting over 50 projects from the Middle East, Africa, and Asia.

According to the public goals of ADI Foundation, the platform aims to achieve the vision of “reaching one billion people” by 2030, especially targeting emerging markets that are not yet widely covered by blockchain.

Why Choose Ethereum Layer 2? The Best Choice for Institution-Oriented Chains

Ethereum supporters point out that compared to building independent public chains, Layer 2 solutions can directly inherit Ethereum’s security and decentralization features, while benefiting from existing development tools and a large ecosystem liquidity support, making it an ideal choice for institutional applications.

For markets like the Middle East, which highly value regulation and the integration of physical assets, Ethereum Layer 2 better balances the two major needs of “scalability and regulatory compliance,” becoming the core infrastructure to promote on-chain finance development.

Ethereum Wins Middle East Trust, Accelerating Global Institutional Chain Reforms

IHC’s shift is another significant indicator following the adoption of blockchain technology by many financial giants and sovereign entities, highlighting Ethereum’s continued leadership in applications such as payments, identity verification, and asset tokenization. As the blockchain industry gradually shifts from speculation to real-world applications, Ethereum Layer 2 is not only the developer’s top choice but is also becoming the common language for large institutions and governments to build digital infrastructure.

This article “Abu Dhabi Giant IHC Abandons Self-Built Public Chain, Turns to Ethereum Layer 2 to Build Institutional-Grade Blockchain Infrastructure” first appeared on Chain News ABMedia.