Tether Plans to Launch a United Arab Emirates Dirham (AED)-Pegged Stablecoin

By Adedapo Adesanya Tether, the largest company in the digital asset industry, intends to develop a United Arab Emirates Dirham (AED)-pegged stablecoin.

Tether, the digital asset industry’s largest company, is set to launch a United Arab Emirates Dirham (AED)-pegged stablecoin.

The Dirham-pegged token will join Tether’s lineup of stablecoin products, including USDt, EURT, CNHT, MXNT, XAUT and aUSDT. It will also spearhead applications for licensing under the UAE Central Bank’s recently announced Payment Token Services Regulation.

“Tether’s upcoming stablecoin is a digital representation of the United Arab Emirates Dirham, with each token being fully backed by an equivalent amount of liquid UAE-based reserves.

“Adhering to Tether’s transparent and robust reserve standards, it ensures that every Dirham-pegged token is pegged 1:1 to the value of the AED, providing stability and confidence in its value,” the statement added.

The global market for stablecoins is currently valued at $150 billion, with USDt alone having a market cap of over $115 billion and projections set to see this industry potential grow to $2.8 trillion by 2028.

Meanwhile, cryptocurrency use in the United Arab Emirates has seen exponential growth since 2022, largely driven by the establishment of the Virtual Asset Regulatory Authority, the world’s first fully independent crypto regulator.

The favorable regulatory environment established in cities like Dubai and Abu Dhabi has positioned them as global hubs for innovation in crypto assets and blockchain technology.

Tether’s Dirham-pegged stablecoin will offer users a cost-effective and seamless way to access the benefits of the AED, while leveraging the transparency and efficiency of blockchain technology.

The digital asset will also facilitate international trade and remittances, slashing transaction fees and providing a hedge against currency fluctuations, playing a pivotal role in the financial ecosystem of the UAE and beyond.

Commenting on the development, Mr Paolo Ardoino, CEO of Tether said, “We’re excited to announce this initiative to develop Tether’s Dirham-pegged stablecoin, expanding our suite of stablecoin options.

“The United Arab Emirates is rapidly emerging as a major global economic center, and we believe our users will find our Dirham-pegged token to be a valuable and versatile addition.”

“Tether’s Dirham-pegged stablecoin is poised to become an essential tool for businesses and individuals seeking a secure and efficient medium of transacting in the United Arab Emirates Dirham whether for cross-border payments, trading, or simply diversifying one’s digital assets,” he added.

Speaking on the collaboration, Mr Seyedmohammad Alizadehfard, Co-Founder and Group CEO of Phoenix Group noted, “We are delighted to be working with Tether on this initiative, bringing a UAE Dirham-pegged stablecoin to the market and are optimistic about its potential in transforming the digital economy for users across the region and beyond.”

“This collaboration with Tether not only underscores our commitment to innovation and excellence but also reflects our dedication to providing financial solutions that meet the needs of our customers.

“Abu Dhabi’s progressive stance towards blockchain, digital assets and innovation makes it the perfect launchpad.”