Collaboration with UAE-Based Firms
Tether Inc., the biggest stablecoin issuer in the world, has come out with new plans to create a stablecoin pegged to the UAE Dihram. The launch will be in partnership with Phoenix Group PLC, one of the UAE’s leading technology giants, and Green Acorn Investments Ltd., thus setting another milestone for the cryptocurrency industry in the region.
Backed one-to-one with liquid reserves situated in the UAE, the new cryptocurrency aims to bring a safe and efficient transaction zone for both people and businesses that live in the country. Tether has yet to share the schedule for the stablecoin’s release nevertheless, they have affirmed the digital asset will comply with the Payment Token Services Regulation which the Central Bank of UAE will introduce only in 2024.
Dubai’s Growing Crypto Sector
Dubai has become a central place for cryptocurrency activities after the launch of the Virtual Asset Regulatory Authority (VARA) in 2022. The Virtual Asset Regulatory Authority (VARA) has moved into the leadership of the cryptocurrency sector in Dubai with their effective regulation, thus contributing to a faster adoption of digital assets in the region.
Tether’s move to launch a dirham-pegged stablecoin comes as a natural development within a favorable legal framework and along with a growing interest in cryptocurrency in the country. The new stablecoin is anticipated to boost international trade and remittances, ensuring cheaper transaction costs and offers the advantage of currency risk reduction.
Tether’s Expanding Portfolio of Stablecoins
The new AED stablecoin will be added to Tether’s existing list of fiat-pegged digital currencies. Over the years, Tether has successfully launched several stablecoins, including EURT, which is backed by the euro, and CNHT, pegged to the Chinese yuan.
The USDT is Tether’s flagship product, and it remains the world’s largest stablecoin, with a market capitalization of more than $117 billion, which is almost 70% of the market share. Tether though being at the top, has been criticized for the problems of USDT being used in sanctioned and illegal activities. In response, the company has collaborated with blockchain analytics firm Chainalysis to track USDT transactions more closely and to ensure compliance with global regulations.
Impact on the UAE Economy
Paolo Ardoino, who is the CEO of Tether, said that he is optimistic about the effect of the new stablecoin on the economy of the UAE. He pointed out that the UAE is becoming a vital global economic hub, and the adoption of a dirham-pegged stablecoin will give users a useful and flexible financial instrument.
While the UAE is continuously establishing itself as a prominent player in the international cryptocurrency market, Tether’s new stablecoin will significantly contribute to the country’s financial system, providing a secure and stable digital transaction method.
