UAE proposes establishing a USD swap line in case of a prolonged war with Iran.

UAE's financial assets include approximately $350B foreign exchange reserves, $150B UST, $60B T-bills, plus hundreds of billions in sovereign wealth funds (SWF).
Assets do not necessarily mean liquidity; UAE needs USD funding.
The swap line will help connect the Fed's balance sheet directly to the domestic financial system.
The WSJ rumors "UAE threatens to swap UST for the Renminbi to pressure the US into agreement" are likely false.
Dumping UST would result in losses for them first, and the Renminbi cannot replace the USD in the global oil and financial systems.
The likelihood of the US agreeing to this is also low:
- Any US ally demands a swap line, but currently the US only maintains swap lines with five partners: the ECB, BOJ, BOE, SNB, and BOC.
- A swap line is a membership with the Fed; members can borrow USD at low rates to flood their domestic markets or manipulate exchange rates.
- In the long run, this could cause inflation of USD outside the US, with excess money flowing back and pushing up import prices.
-> The US can simply refuse; after all, UAE has no "impossible to refuse" condition that can threaten them.