Stablecoin issuer Tether plans to launch a new stablecoin pegged to the United Arab Emirates dirham (AED), marking an expansion in its digital asset portfolio.
Developed in partnership with UAE-based technology conglomerate Phoenix Group PLC and supported by Green Acorn Investments Ltd, this project will leverage the UAE’s regulatory framework for payment token services.
Stablecoin pegged to the UAE dirham
According to the official press release shared with CryptopotatoThe dirham-pegged stablecoin will be backed by liquid AED reserves, meeting Tether’s standards to ensure “stability and trust.”
This new product aims to improve international trade, streamline remittances, and offer a hedge against currency fluctuations by providing a digital representation of the AED. Tether’s new dirham-pegged stablecoin joins the company’s list of other fiat-backed tokens such as USDT and EURT.
Commenting on the potential impact, Tether CEO Paolo Ardoino said:
“The UAE is emerging as a major 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 will become an essential tool for businesses and individuals looking for a secure and efficient means of transacting in UAE dirhams, whether for cross-border payments, trading, or simply to diversify their digital assets.”
The stablecoin market is currently valued at $150 billion, of which USDT accounts for over $115 billion, according to the firm’s estimates. Furthermore, industry forecasts suggest that this sector could expand to $2.8 trillion by 2028.
Cryptocurrency adoption in the UAE
Cryptocurrency adoption in the UAE has been on the rise since 2022, primarily due to the creation of the Virtual Asset Regulatory Authority (VARA), the first independent regulator of its kind. This favorable regulatory landscape has made cities like Dubai and Abu Dhabi leading hubs for cryptocurrency and blockchain innovation.
Recent figures from Bitget research revealed a surge in cryptocurrency usage in the Middle East, with the average number of daily traders surpassing 500,000 by February 2024. The UAE leads in per capita adoption, reaching a peak of 106,111 daily active users in 2024 and witnessing a 68% increase in daily traders compared to the previous year.
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