Tether to Launch UAE Dirham-Pegged Stablecoin

On August 21, Tether, the company behind the USDT stablecoin, announced its plans to introduce a new stablecoin tied to the United Arab Emirates Dirham (AED). This new stablecoin, developed in partnership with UAE-based tech giant Phoenix Group PLC and supported by Green Acorn Investments Ltd, will expand Tether’s existing range of stablecoins.

Tether’s current stablecoin offerings include USDt (pegged to the U.S. dollar), EURT (pegged to the Euro), CNHT (pegged to the Chinese Yuan), MXNT (pegged to the Mexican Peso), XAUT (pegged to gold), and aUSDT (pegged to the Australian Dollar).

According to Tether, each Dirham-pegged token will be fully backed by liquid reserves in the UAE, ensuring its value remains stable and tied to the AED. This aligns with Tether’s established reserve standards.

The new Dirham-pegged stablecoin is expected to provide several benefits, particularly in international trade, remittances, and digital transactions. By utilizing blockchain technology, the stablecoin will enable seamless, cost-effective transactions, reduce fees, and offer protection against currency fluctuations.

Paolo Ardoino, CEO of Tether, highlighted the strategic importance of this initiative, noting the UAE’s rapid emergence as a global economic hub. Ardoino expressed confidence that the Dirham-pegged token would be a valuable addition to Tether’s offerings, providing users with a secure and efficient means of transacting in AED. He emphasized its potential for cross-border payments, trading, and portfolio diversification within the digital asset space.

Tether noted that the UAE has seen significant growth in cryptocurrency usage since 2022, driven by progressive regulatory developments such as the establishment of the Virtual Asset Regulatory Authority, the world’s first independent crypto regulator. The favorable regulatory environment in cities like Dubai and Abu Dhabi has positioned the UAE as a global hub for innovation in crypto assets and blockchain technology.

Tether’s Dirham-pegged stablecoin is expected to seek licensing under the UAE Central Bank’s recently announced Payment Token Services Regulation, further integrating it into the region’s financial framework. This move could solidify the stablecoin’s role in the UAE’s financial markets and contribute to the broader adoption of digital currencies in the region.

The global stablecoin market is currently valued at around $150 billion, with Tether’s USDt alone having a market cap of over $115 billion. Industry projections suggest that the market could grow to $2.8 trillion by 2028, reflecting the expanding role of stablecoins in the global financial landscape.

Phoenix Group’s Co-Founder and Group CEO, Seyedmohammad Alizadehfard, expressed excitement about the collaboration with Tether, highlighting the transformative potential of the Dirham-pegged stablecoin in the region’s digital economy. Alizadehfard emphasized that the partnership underscores both companies’ commitment to innovation and excellence, and reflects their dedication to providing financial solutions that meet the evolving needs of customers. He also noted that Abu Dhabi’s forward-thinking approach to blockchain and digital assets makes it an ideal launchpad for this new stablecoin.

Sentiment: Positive