Tether Plans to Introduce a New Token Pegged to the United Arab Emirates Dirham (AED)

Tether, the developer behind the world's largest stablecoin, plans to introduce a new token pegged to the United Arab Emirates dirham (AED)

stablecoin issuer Tether is preparing to launch a new token pegged to the United Arab Emirates dirham (AED), in partnership with Abu Dhabi-listed crypto conglomerate Phoenix Group and Green Acorn Investments.

The move marks Tether’s expansion beyond non-dollar stablecoins, capitalizing on the UAE’s growing stature as a global cryptocurrency hub.

Stablecoins are digital assets pegged to fiat currencies, offering a hedge against the volatility of cryptocurrencies like Bitcoin. Tether’s USDT is the largest stablecoin, dominating the market with a capitalization of over $117 billion, accounting for nearly 70% of the stablecoin market.

However, stablecoins pegged to other fiat currencies, such as Tether’s euro-pegged EURT, have a much smaller market presence. The introduction of a dirham-pegged stablecoin could diversify Tether’s offerings and cater to the demand for Gulf currencies.

Tether plans to apply for licensing for the new stablecoin under the UAE Central Bank’s recently announced Payment Token Services Regulation, which could be advantageous given Dubai and Abu Dhabi’s reputations as crypto-friendly cities.

“The UAE is becoming a major global economic hub, and we believe our users will find our dirham-pegged token to be a valuable and versatile addition,” said Tether CEO Paolo Ardoino in a statement.

Highlighting the stablecoin’s utility as a secure and efficient tool for cross-border payments, trading, and diversifying digital assets, Ardoino added, “We are excited to offer this new stablecoin and continue working closely with partners in the region to drive the adoption of digital currencies.”

The dirham-pegged stablecoin will complement Tether’s existing lineup of fiat-pegged tokens, including USDT and EURT, further solidifying Tether’s position as the largest issuer of stablecoins by market capitalization.

Owned by Hong Kong-headquartered Ifinex, Tether provides a breakdown of its reserves and a complete list of reserve custodians.

Meanwhile, other stablecoins under Tether’s purview, such as Tether Gold (XAUT), Tether EURt (EURT), Mexican Peso Tether (MXNT), and Tether Chinese Yuan (CNHT), do not enjoy the same level of liquidity cushion as USDT, according to the report.

These stablecoins lack balances to maintain a 1:1 peg in times of crisis.