New stablecoin targets enhancing UAE's digital economy and streamlining transactions.
Key Takeaways
- Tether's new stablecoin is fully backed by UAE-based liquid reserves.
- Tether aims to be a pioneer in the UAE's crypto market by being among the early adopters of the new regulatory framework.
Tether, the issuer of the largest stablecoin in the digital asset sector, announced Wednesday it is developing a new stablecoin pegged to the United Arab Emirates Dirham (AED) in partnership with UAE’s tech giant Phoenix Group and Green Acorn Investments.
“We’re pleased to announce this initiative to develop Tether’s Dirham-pegged stablecoin, adding to our range of stablecoin options,” said Paolo Ardoino, CEO of Tether.
Tether’s new Dirham-pegged stablecoin will be one of the first stablecoins to seek regulatory approval under the UAE Central Bank’s new Payment Token Services Regulation.
“We are thrilled to be working with Tether on bringing a UAE Dirham-pegged stablecoin to the market and are confident of its potential in transforming the digital economy for users across the region and beyond,” said Seyedmohammad Alizadehfard, Co-Founder and Group CEO of Phoenix Group.
Tether said each Dirham-pegged token will be fully backed by real AED reserves held in the UAE. With the new stablecoin, the company aims to expand its array of stablecoin offerings, which already include USDT, EURT, CNHT, MXNT, XAUT, and aUSDT.
The Dirham-pegged stablecoin by Tether will offer a secure and efficient way to use the Dirham in the digital world, the firm noted. It also targets users who are looking to streamline international trade and remittances.
Tether expects the new product to help reduce transaction fees compared to traditional methods and provide a hedge against currency fluctuations.
“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 added.
The Dirham-pegged stablecoin will follow the launch of Alloy, Tether’s digital asset backed by Swiss-stored gold, in June.
Besides diversifying its product offerings, the firm has expanded into new blockchains. Tether recently revealed that it plans to launch the USDT stablecoin on the Celo Network and the Aptos blockchain.
Market potential
The global stablecoin market is booming, currently valued at $150 billion. Tether’s USDT alone has a market cap of over $115 billion.
Tether believes the Dirham stablecoin will be valuable for individuals and businesses in the UAE and beyond. The UAE’s favorable regulatory environment creates an opportunity for the new stablecoin to play a role in the region’s digital financial future.
“The United Arab Emirates 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,” Ardoino stated.
Crypto use in the UAE has grown rapidly since 2022 due to supportive regulations. Dubai and Abu Dhabi are emerging as hubs for crypto and blockchain innovation.
