Tether, a leading issuer of global stablecoins, has announced plans to launch a new stablecoin pegged 1:1 to the United Arab Emirates Dirham (AED). This initiative is designed to bolster the digital asset landscape in the UAE, supported by reserves held within the country.
In collaboration with Phoenix Group PLC, a major technology conglomerate in the Arab region, and Green Acorn Investments Ltd, Tether is in the early stages of developing the Dirham-pegged stablecoin.
The partnership aims to ensure that the new digital asset maintains stability and is fully backed by UAE-based reserves, upholding Tether’s commitment to transparency and trust.
Scheduled for an upcoming launch, the new stablecoin will serve as a digital equivalent of the AED. Paolo Ardoino, CEO of Tether, expressed optimism about the project, highlighting that the Dirham-pegged stablecoin will provide users with a dependable and efficient method for transactions, particularly in cross-border payments and trading.
The introduction of the AED-pegged stablecoin is expected to transform the UAE’s crypto market by facilitating smoother international trade, reducing transaction fees, and offering a hedge against currency fluctuations. This move aligns with the UAE’s ambition to become a global economic hub and a leader in digital finance.
Seyedmohammad Alizadehfard, co-founder of Phoenix Group, lauded the potential impact of the new stablecoin on the region’s digital economy. “We are excited to collaborate with Tether on this initiative and are confident in its ability to address the needs of users across the UAE and beyond,” he said.
The Dirham-pegged stablecoin will operate under the newly introduced Payment Token Services Regulation by the Central Bank of the UAE. This regulatory framework is designed to ensure stablecoin issuers maintain adequate reserves and comply with local laws, enhancing the credibility of digital assets in the region.
The launch comes amid rapid growth in cryptocurrency usage in the UAE, fueled by the establishment of the Virtual Asset Regulatory Authority (VARA), the world’s first independent crypto regulator. This favorable regulatory environment has positioned cities like Dubai and Abu Dhabi as key destinations for crypto companies.
With the global stablecoin market valued at approximately $150 billion, and Tether’s USDT alone holding a market cap exceeding $115 billion, analysts forecast that the market could reach $2.8 trillion by 2028. The introduction of Tether’s AED-backed stablecoin is set to play a crucial role in the UAE’s advancement as a leader in the global cryptocurrency market.
