Tether, the issuer of the USDT stablecoin, announced its collaboration with Phoenix Group and Green Acorn Investments to develop a new stablecoin pegged to the United Arab Emirates dirham (AED). The initiative is intended to “lead the way” in seeking licenses under the country’s new regulatory framework and facilitate transactions.
Tether unveils stablecoin pegged to UAE dirham
Tether has revealed its plan to develop and launch a “digital representation” of the UAE dirham. UAE-based Liquid Reservations will fully support the upcoming stablecoin to ensure that “every dirham-pegged token is pegged to the value of the AED, providing stability and confidence in its value.”
Tether announces new Dirham-pegged Stablecoin. Source: Tether on X
The dirham-pegged stablecoin will join the company’s roster of products to provide users with “seamless and cost-effective” methods of accessing AED benefits while leveraging the transparency and efficiency of blockchain technology.
Tether will collaborate with UAE-based multi-billion dollar technology conglomerate Phoenix Group and will have investment assistance from Green Acorn for the stablecoins development. The new digital asset is intended to streamline international trade and remittances in the area.
Furthermore, it seeks to play a crucial role in the UAE’s financial ecosystem by reducing transaction fees and protecting users against currency fluctuations. In the announcement, Tether CEO Paolo Ardoino expressed his excitement about the new stablecoin product:
We are pleased to announce this initiative to develop the Tether dirham-pegged stablecoin, adding to our range of stablecoin options. 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. The Tether 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.
New regulation of payment token services in the United Arab Emirates
Seyed Mohammad Alizadehfard, Co-Founder and Group CEO of Phoenix Group, stressed his confidence in the potential of the dirham-pegged stablecoin to transform the digital economy in the region and beyond.
The CEO highlighted Abu Dhabi’s “progressive stance towards blockchain, digital assets and innovation,” making it the “perfect launch pad” for the product. According to the announcement, the companies will “lead the way in seeking licenses” under the Central Bank of the UAE’s (CBUAE) new Payment Token Services Regulation (PTRS).
The CBUAE recently Uncovered Its new regulatory framework for stablecoin-related services in the UAE. Under the new PTRS guidelines, businesses and sellers in the Emirates cannot accept cryptocurrency payments for goods and services unless they are dirham-backed payment tokens.
In addition, foreign payment token issuers must register with the Central Bank and maintain 100% of cash asset reserves in an escrow account. The CBUAE also granted a one-year transition period, ending in June 2025, in which the PTRS will not be enacted, allowing companies to adhere to the new regulations.
It should be noted that the new regulations will not 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 that are already licensed by the Virtual Assets Regulatory Authority (VARA).
Total crypto market cap sits at $2.049 trillion in the weekly chart. Source: TOTAL on TradingView
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