On August 21, USDT stablecoin issuer Tether, announced a new venture to launch a stablecoin pegged to the United Arab Emirates Dirham (AED). This initiative is being undertaken in partnership with Phoenix Group PLC, an Abu Dhabi Securities Exchange-listed company, and supported by Green Acorn Investments Ltd.
The proposed stablecoin will join Tether’s existing range of digital assets, which include stablecoins tied to the US dollar (USDT), Euro (EURT), Mexican Peso (MXNT), Chinese Yuan (CNHT), and Tether Gold (XAUt), which is linked to physical gold.
According to Tether CEO Paolo Ardoino, the Dirham-pegged stablecoin is designed to offer a dependable and cost-efficient option for financial transactions. The new asset, which will maintain a 1:1 peg with the Dirham, aims to reduce transaction fees and enhance payment speed and transparency by leveraging blockchain technology.
Ardoino highlighted the significance of the UAE as a global economic center, stating, “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.”
The stablecoin will be subject to regulation under the UAE Central Bank’s recently introduced Payment Token Services Regulation. It is expected to play a role in streamlining international trade and remittances, while also providing protection against currency fluctuations.
Tether has noted the growth of cryptocurrency usage in the UAE since 2022, crediting the country’s favorable regulatory environment for this increase. The establishment of the Virtual Asset Regulatory Authority, the first independent crypto regulator in the world, has positioned the UAE as a significant player in the blockchain and digital assets sectors.
Seyedmohammad Alizadehfard, Co-Founder and Group CEO of Phoenix Group, expressed optimism about the partnership with Tether. He remarked that the collaboration reflects a shared commitment to innovation and meeting customer needs.
“This partnership underscores our dedication to providing financial solutions that cater to the evolving needs of customers,” Alizadehfard said, noting that Abu Dhabi’s progressive stance on blockchain and digital assets makes it a fitting location for the stablecoin’s launch.
This initiative is part of Tether’s broader strategy to diversify its offerings and strengthen its presence in the global financial market. Currently, the global stablecoin market is valued at approximately $150 billion, with Tether’s USDT representing over $115 billion of that total. Projections suggest that the stablecoin market could expand to $2.8 trillion by 2028, reflecting its growing importance in the global economy.
The latest development comes two months after the Board of the UAE Central Bank approved the issuance of regulations for licensing and overseeing stablecoin arrangements.
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