[NEWS] Tether to issue stablecoin pegged to UAE dirham

Tether, which issues USDT, has announced plans to issue a stablecoin pegged to the United Arab Emirates (UAE) dirham (AED).

The coin will be issued in partnership with Phoenix Group PLC, a UAE tech company valued at billions of dollars, and Green Acorn Investments Ltd.

Tether has issued USDT, EURT, CNHT, MXNT, XAUT, and aUSDT stablecoins, and will add an AED stablecoin in the future.

The stablecoin will be issued under a license under the Payment Token Services Regulation recently announced by the UAE Central Bank.

Tether's latest stablecoin is a digital representation of the UAE dirham, and each token will be fully backed by liquid UAE-based reserves.

Tether adheres to a transparent and robust reserve standard, ensuring that all dirham-pegged tokens are pegged to the same value as the AED, providing stability and reliability to its value.

A dirham-pegged stablecoin provides users with a seamless and cost-effective way to access the benefits of the AED, while leveraging the transparency and efficiency of blockchain technology.

Streamlining international trade and remittances

The digital asset is expected to streamline international trade and remittances, dramatically reduce transaction fees, provide a hedge against currency fluctuations, and play a key role in the financial ecosystem in the UAE and beyond.

Tether CEO Paolo Ardoino said in a statement: "We are pleased to announce this initiative to develop a dirham-pegged stablecoin and increase Tether's stablecoin options. The UAE is becoming a central part of the global economy, and we are innovating to make our dirham-pegged token valuable and versatile for our users. Whether it's cross-border payments, trading, or simply diversifying their digital assets, it will be an essential tool for businesses and individuals looking for a safe and efficient means of transacting in the UAE dirham." The global stablecoin market is currently $150 billion. USDT alone has a market capitalization of over $115 billion and is projected to grow to $2.8 trillion by 2028. The use of crypto assets in the UAE has grown exponentially since 2022 with the establishment of the Crypto Asset Regulatory Authority, the world's first independent crypto asset regulator. The well-established regulatory environment in cities like Dubai and Abu Dhabi has transformed these cities into innovation hubs for crypto assets and blockchain technology.

Reference: Announcement
Image: Shutterstock

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