Tether Reveals UAE Dirham-Pegged Stablecoin

Tether, the issuer of the USDT stablecoin, announced its collaboration with Phoenix Group and Green Acorn Investments to develop a new stablecoin pegged

Stablecoin issuer Tether is collaborating with Phoenix Group and Green Acorn Investments to develop a new stablecoin pegged to the United Arab Emirates Dirham (AED). The initiative will reportedly lead the way in seeking licensing under the country’s new regulatory framework and is set to facilitate international trade and remittances.

Tether to Launch Dirham-Pegged Stablecoin

Tether has announced its plan to develop and launch a “digital representation” of the United Arab Emirates Dirham. The upcoming stablecoin will be fully backed by liquid UAE-based reserves to ensure that “every Dirham-pegged token is tied to the value of the AED, providing stability and confidence in its value.”

The Dirham-pegged stablecoin will join the company’s slate of products to provide users with “seamless and cost-effective” methods of accessing the AED’s benefits while leveraging blockchain technology’s transparency and efficiency.

In its announcement, Tether stated that it will collaborate with Phoenix Group, a multi-billion tech conglomerate in the UAE, for the stablecoin’s development. The initiative will also be supported by Green Acorn Investments.

The new digital asset is set to streamline international trade and remittances in the area. Additionally, it seeks to play a crucial role in the financial ecosystem of the UAE by reducing transaction fees and protecting users against currency fluctuations.

Tether’s CEO Paolo Ardoino had this to say regarding the new stablecoin product:

“We’re pleased to announce this initiative to develop Tether’s Dirham-pegged stablecoin, adding to our range of stablecoin options. The United Arab Emirates is becoming a significant global economic hub, and we believe our users will find our Dirham-pegged token to be a valuable and versatile addition. Tether’s Dirham-pegged stablecoin is set to become an essential tool for businesses and individuals looking for a secure and efficient means of transacting in the United Arab Emirates Dirham whether for cross-border payments, trading, or simply diversifying one’s digital assets.”

Stablecoins in the UAE: Key Updates

Seyed Mohammad Alizadehfard, co-founder and Group CEO of Phoenix Group, expressed his confidence in the Dirham-pegged stablecoin's potential to transform the digital economy in the region and beyond. The CEO highlighted Abu Dhabi’s “progressive stance towards blockchain, digital assets, and innovation,” which makes it the “perfect launchpad” for the product.

Per the announcement, the companies will “lead the way in seeking licensing” under the new Central Bank of the United Arab Emirates (CBUAE) Payment Token Services Regulation (PTRS).

The CBUAE recently unveiled its new regulatory framework for stablecoin-related services in the UAE. Under the new PTRS guidelines, businesses and vendors in the Emirates can’t accept crypto payments for goods and services unless they are a Dirham-backed payment token.

Furthermore, Foreign Payment Token Issuers must register with the Central Bank and hold 100% of the reserves of assets in cash in an escrow account.

The CBUAE also gave a one-year transitional period, ending in June 2025, in which the PTRS won’t be enacted, allowing businesses to adhere to the new regulations.

It is worth noting that the new regulations won’t apply in financial zones, such as the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM). However, the PTSR applies to entities already licensed by the Virtual Asset Regulatory Authority (VARA).