Tether, the largest company in the digital asset industry, has announced plans for the addition of a new stablecoin that is pegged to the UAE dirham (AED).
Set to be launched in collaboration with UAE’s multi-billion dollar-tech conglomerate, Phoenix Group PLC, and with support from Green Acorn Investments Ltd, the Dirham-pegged token joins Tether’s slate of stablecoin products that include USDt, EURT, CNHT, MXNT, XAUT and aUSDT.
Interestingly, this comes just after a week of Dubai legalised cryptocurrency salaries. In true pioneering spirit, it will lead the way in seeking licensing under the UAE Central Bank’s recently announced Payment Token Services Regulation.
Tether’s latest upcoming stablecoin is a digital representation of the AED, with each token being fully backed by liquid UAE-based reserves. Adhering to Tether’s transparent and robust reserve standards, it ensures that every Dirham-pegged token is tied to the value of the AED, providing stability and confidence in its value.
Streamlines Global Remittances
Tether’s Dirham-pegged stablecoin will provide users with a seamless and cost-effective means of accessing the benefits of the AED while leveraging the transparency and efficiency of blockchain technology. This digital asset will streamline international trade and remittances, reduce transaction fees, and provide a hedge against currency fluctuations, thus playing a crucial role in the financial ecosystem of the UAE and beyond.
Tether CEO Paolo Ardoino said that this initiative to develop Tether’s Dirham-pegged stablecoin will be adding to their range of stablecoin options.
“The UAE is becoming a significant global economic hub, and we believe our users will find our Dirham-pegged token to be a valuable and versatile addition. Tether’s Dirham-pegged stablecoin is set to become an essential tool for businesses and individuals looking for a secure and efficient means of transacting in the United Arab Emirates Dirham whether for cross-border payments, trading, or simply diversifying one’s digital assets,” Ardoino said.
The global market for stablecoins is currently valued at $150 billion, with USDt alone having a market cap of more than $115 billion, and projections see this industry’s potential growth to $2.8 trillion by 2028.
Crypto’s Exponential Growth
Cryptocurrency usage in the UAE has experienced exponential growth since 2022, driven by the establishment of the Virtual Asset Regulatory Authority (VARA) in Dubai, the world’s first independent crypto regulator.
The favourable regulatory environment thus established in cities like Dubai and Abu Dhabi, has transformed them into global hubs for innovation in crypto assets and blockchain technology.
Co-Founder and Group CEO of Phoenix Group Seyedmohammad Alizadehfard said that working with Tether on bringing a UAE Dirham-pegged stablecoin to the market has its potential in transforming the digital economy for users across the region and beyond.
“This collaboration with Tether not only underscores our commitment to innovation and excellence but also reflects our dedication to providing financial solutions that meet the needs of our customers. Abu Dhabi’s progressive stance towards blockchain, digital assets and innovation makes it the perfect launch pad,” he added.
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