Tether, a leading entity in the digital asset market, has unveiled plans to introduce a new stablecoin pegged to the United Arab Emirates Dirham (AED). This initiative, announced on 21 August 2024, is set to be realised through collaboration with Phoenix Group, a prominent UAE-based tech conglomerate, and Green Acorn Investments. The Dirham-pegged stablecoin will be fully supported by UAE-based liquid reserves, aligning with Tether’s commitment to transparency and robust reserve standards.
The partnership with Phoenix Group and Green Acorn Investments aims to create a digital representation of the AED, which is expected to enhance the stability and efficiency of financial transactions in the region. The new token will complement Tether’s existing stablecoin offerings, including USDt, EURT, CNHT, and others. This development is anticipated to streamline international trade, reduce transaction fees, and provide a hedge against currency fluctuations, thus bolstering the financial infrastructure of the UAE.
Paolo Ardoino, CEO of Tether, highlighted the strategic importance of this new stablecoin. “The United Arab Emirates is becoming a significant global economic hub, and we believe our Dirham-pegged token will be a valuable addition. It will serve as an essential tool for businesses and individuals, facilitating secure and efficient transactions in AED.”
Market Impact and Expansion
The introduction of the Dirham-pegged stablecoin comes as the global stablecoin market, valued at approximately $150 billion, continues to expand. Tether’s USDt, with a market cap exceeding $115 billion, is a major player in this sector. The UAE’s favourable regulatory environment, particularly since establishing the Virtual Asset Regulatory Authority, has positioned the region as a burgeoning hub for cryptocurrency and blockchain innovation.
A momentous occasion as Phoenix and @Tether_to officially unite to reshape the digital assets landscape. This partnership marks a pivotal step forward in transforming the digital economy for users across the region and beyond. pic.twitter.com/fO1OL0DSJh
Seyed Mohammad Alizadehfard, Co-Founder and CEO of Phoenix Group, expressed enthusiasm about the collaboration. “This partnership reflects our commitment to innovation and excellence. Abu Dhabi’s progressive stance on digital assets makes it the ideal launchpad for our new stablecoin.”
Regulatory and Future Prospects
The Dirham-pegged stablecoin will seek licensing under the UAE Central Bank’s Payment Token Services Regulation, a process expected to take several months. This regulatory endorsement will ensure the token’s integration into the financial ecosystem.
As the UAE advances its position as a global cryptocurrency hub, this stablecoin is poised to play a significant role in facilitating cross-border transactions and bolstering digital asset diversity.
Conclusion
Tether’s new Dirham-pegged stablecoin represents a significant step in expanding stablecoins’ reach beyond traditional currencies. This stablecoin aims to enhance transactional efficiency and provide greater stability in the digital asset landscape by leveraging the UAE’s dynamic financial environment and regulatory framework.
