Ealier today, on 21st August, Tether, the largest company in the digital asset company, announced plans to launch a new stablecoin pegged to the United Arab Emirates Dirham (AED).
This initiative is set to be introduced in collaboration with the UAE’s multi-billion-dollar tech conglomerate Phoenix Group PLC.Â
According to the news, it will have additional support from Green Acorn Investments Ltd. The new Dirham-pegged stablecoin will join Tether’s diverse suite of stablecoins, which already includes products like USDt, EURt, and CNHt.
Fully Liquid UAE-based Reserves Stablecoin
Liquid UAE-based reserves will provide complete support for the Dirham-pegged stablecoin, guaranteeing stability and trust in its value. Because Tether adheres to strict reserve requirements, every token is guaranteed to be correlated with the value of the AED, providing users with a trustworthy digital representation of their money.
This innovation is anticipated to play a crucial role in the financial ecosystem of the UAE and beyond by streamlining international trade and remittances, lowering transaction fees, and offering a hedge against currency swings.
To further integrate itself into the regional financial system, the Dirham stablecoin will also apply for authorisation under the recently released Payment Token Services Regulation of the UAE Central Bank. For Tether, which is still setting the standard for stablecoin innovation, receiving this governmental certification will be a significant turning point.
Paolo Ardoino, CEO of Tether, expressed excitement about this development, noting the UAE’s growing importance as a global economic hub. “Our Dirham-pegged stablecoin will offer businesses and individuals a secure and efficient means of transacting in AED, whether for cross-border payments, trading, or diversifying digital assets,” said Ardoino.
Rising Expansion of the Stablecoin Market
Stablecoins are presently valued at $150 billion worldwide, with USDt, the leading stablecoin from Tether, having a market capitalisation of more than $115 billion. By 2028, the stablecoin market is expected to grow to a value of $2.8 trillion.
The UAE has witnessed a sharp rise in the use of cryptocurrencies, largely due to its progressive legal framework in places like Dubai and Abu Dhabi. The UAE’s standing as a pioneer in blockchain innovation has been further cemented with the founding of the Virtual Asset Regulatory Authority (VARA), the first autonomous cryptocurrency regulator in history.
According to CEO Paolo Ardoino, Tether Holdings Ltd. intends to expand by hiring twice as many people in the upcoming year to bolster departments like finance and compliance.
By the middle of 2025, the company wants to employ roughly 200 people. Tether has seen significant growth despite its small workforce, generating $1.3 billion in second-quarter profit.
Co-founder and Group CEO of Phoenix Group Seyedmohammad Alizadehfard highlighted the potential of this collaboration with Tether, saying that the stablecoin tied to the dirham will revolutionise the digital economy for people in the area. He also emphasised how Abu Dhabi is a perfect starting point for these kinds of initiatives because of its progressive attitude towards digital assets.