3 months ago
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Once launched, the new product will join Tether’s other stablecoins, including those pegged to the US dollar (USDT), the European euro (EURT), Mexican pesos (MXNT), Chinese yuan (CNHT), and Tether Gold (XAUt), which tracks the value of physical gold.
Tether, a leading global stablecoin issuer, is planning to roll out a new stablecoin pegged 1:1 to the value of the United Arab Emirates Dirham (AED). According to a Wednesday announcement, the upcoming product will be fully backed by liquid UAE-based reserves, in line with the company’s standards to “ensure stability and trust in its value.”
The new stablecoin is currently in its early development stage. Tether has partnered with Phoenix Group PLC, a prominent tech conglomerate in the Arab region, and Green Acorn Investments Ltd to bring the stablecoin to market.
A Transformative Impact
Together, the three companies are working to ensure that the Dirham-pegged stablecoin, which serves as a digital representation of the fiat currency, maintains its stability and remains constantly on par with the reserve assets.
Seyedmohammad Alizadehfard, co-founder of Phoenix Group, believes the digital asset will have a transformative impact on the UAE crypto market.
“We are thrilled to be working with Tether on bringing a UAE Dirham-pegged stablecoin to the market and are confident in its potential to transform the digital economy for users across the region and beyond,” he said.
Once launched, the new product will join Tether’s other stablecoins, including those pegged to the US dollar (USDT), the European euro (EURT), Mexican pesos (MXNT), Chinese yuan (CNHT), and Tether Gold (XAUt), which tracks the value of physical gold.
Tether claims that the new digital asset, while maintaining a 1:1 peg to the Dirham, will provide users with the benefits of blockchain technology. By moving transactions onto the blockchain, the stablecoin aims to reduce transaction fees and increase the speed and transparency of payments.
A Game-Changer for UAE Users
Tether CEO Paolo Ardoino said the Dirham-pegged stablecoin will cater to businesses and individuals seeking a more reliable and cost-effective way to manage financial transactions, particularly for cross-border payments, trading, and asset diversification.
The introduction of the digital asset is also expected to streamline international trade and remittances while offering a hedge against currency fluctuations — two significant challenges for companies and investors operating in the UAE market.
The Dirham-pegged stablecoin will be regulated under the Central Bank’s newly announced Payment Token Services Regulation.
Ardoino emphasized that the launch of the stablecoin in the UAE would be a significant addition for customers in the region.
“The United Arab Emirates is becoming a global economic hub, and we believe our Dirham-pegged token will be a valuable and versatile addition for our users,” said Ardoino.
Rising Crypto Usage in the UAE
The planned launch of the AED-backed stablecoin comes at a time when crypto usage in the UAE has seen exponential growth, largely driven by the establishment of the Virtual Asset Regulatory Authority (VARA), the world’s first independent crypto regulator.
As a result of the favorable regulatory environment, cities like Dubai and Abu Dhabi have become prime destinations for crypto companies looking to expand into the region.
With the global stablecoin market currently valued at $150 billion, USDT alone holds a market cap of over $115 billion, industry analysts project the market to grow to $2.8 trillion by 2028. This further positions the UAE as a key player in the future of digital finance.
