In a significant move within the digital asset industry, Tether, the world’s largest stablecoin issuer, has unveiled plans to introduce a new stablecoin pegged to the United Arab Emirates Dirham (AED). This announcement marks a strategic collaboration between Tether, the UAE’s multi-billion dollar tech conglomerate, Phoenix Group PLC, and Green Acorn Investments Ltd. The Dirham-pegged token will join Tether’s existing portfolio of stablecoins, which includes USDt, EURT, CNHT, MXNT, XAUT, and aUSDT. It will also be among the first digital assets to seek licensing under the UAE Central Bank’s newly established Payment Token Services Regulation.
The forthcoming stablecoin will be fully backed by liquid UAE-based reserves, adhering to Tether’s stringent reserve standards. Each Dirham-pegged token will mirror the value of the AED, ensuring stability and bolstering confidence among users. By offering a secure digital representation of the Dirham, Tether aims to provide a seamless, cost-effective solution for individuals and businesses looking to leverage blockchain technology while benefiting from the stability of the AED.
Paolo Ardoino, CEO of Tether, commented on the initiative, stating, “We’re delighted to announce the development of Tether’s Dirham-pegged stablecoin, expanding our range of stablecoin offerings. The United Arab Emirates is rapidly becoming a major global economic hub, and we believe our Dirham-pegged token will serve as a valuable and versatile tool. Whether for cross-border payments, trading, or diversifying digital assets, this stablecoin will provide a secure and efficient means of transacting in the UAE Dirham.”
The introduction of this stablecoin is expected to play a pivotal role in the UAE’s financial ecosystem, enhancing international trade, streamlining remittances, and offering a hedge against currency fluctuations. The digital asset will also reduce transaction costs, further strengthening its appeal in the global market.
The global stablecoin market is currently valued at approximately $150 billion, with Tether’s USDt commanding a market cap of over $115 billion. Projections suggest that the industry could expand to $2.8 trillion by 2028. In the UAE, cryptocurrency usage has surged since 2022, driven by the establishment of the Virtual Asset Regulatory Authority, the world’s first independent crypto regulator. This regulatory environment has positioned cities like Dubai and Abu Dhabi as global centres for innovation in crypto assets and blockchain technology.
Seyedmohammad Alizadehfard, Co-Founder and Group CEO of Phoenix Group, expressed enthusiasm about the partnership, stating, “We are thrilled to collaborate with Tether in bringing a UAE Dirham-pegged stablecoin to market. This initiative not only highlights our commitment to innovation but also reflects our dedication to delivering financial solutions that cater to the needs of our customers. Abu Dhabi’s forward-thinking approach to blockchain, digital assets, and innovation makes it the ideal launchpad for this new stablecoin.”
Tether’s Dirham-pegged stablecoin is poised to become an integral part of the digital economy, offering users in the UAE and beyond a robust, reliable, and efficient means of accessing the benefits of the AED through blockchain technology.
