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- Stablecoin issuer Tether has announced plans to introduce a new stablecoin, pegged to the United Arab Emirates Dirham (AED).
- This initiative will involve collaboration with UAE-based tech firm Phoenix Group PLC and support from Green Acorn Investments Ltd, leveraging the UAE’s regulatory environment for Payment Token Services.
- Highlighting the project’s significance, Tether CEO Paolo Ardoino remarked its potential in enhancing international trade, remittances, and currency stability.
Discover the latest stablecoin development by Tether with the UAE Dirham as its backbone, aiming to bolster trade, remittances, and currency stability.
Tether’s Expansion with UAE Dirham-Pegged Stablecoin
Tether, renowned for its prominent stablecoin USDT, is diversifying its portfolio by launching a new stablecoin pegged to the UAE Dirham (AED). This move is part of a strategic collaboration with Phoenix Group PLC and supported by Green Acorn Investments Ltd, utilizing UAE’s regulatory framework for Payment Token Services. The new Dirham-backed stablecoin will be backed by liquid AED reserves, assuring “stability and confidence” as per Tether’s standards. This digital asset aims to facilitate international trade, enhance remittance processes, and provide a hedge against currency fluctuations.
Impact on Global and Regional Markets
CEO Paolo Ardoino believes this Dirham-pegged stablecoin will be a versatile tool for businesses and individuals in the UAE. The stablecoin is set to become a crucial instrument for secure transactions involving the Dirham, fostering efficiency in cross-border payments, trading, and digital asset diversification. The global stablecoin market, valued at $150 billion and with USDT dominating at over $115 billion, is projected to grow substantially, potentially reaching $2.8 trillion by 2028.
Crypto Adoption Trends in the UAE
Since the establishment of the Virtual Asset Regulatory Authority (VARA) in 2022, the UAE has emerged as a significant hub for crypto and blockchain technology. This regulatory support has propelled cities like Dubai and Abu Dhabi to the forefront of the global crypto landscape. Data from Bitget’s Research indicated a notable increase in crypto usage in the Middle East, with daily traders exceeding 500,000 as of February 2024. Particularly, the UAE boasts the highest per capita adoption in the region, with daily active users reaching 106,111 in 2024, marking a 68% increase from the previous year.
Future Outlook and Strategic Importance
As the UAE continues to position itself as a leader in the crypto space, the introduction of a Dirham-pegged stablecoin by Tether signifies a strategic enhancement in the region’s financial ecosystem. This development not only underscores Tether’s adaptability and forward-thinking approach but also aligns with the UAE’s vision of becoming a global economic hub. The collaboration with Phoenix Group and Green Acorn Investments exemplifies a robust support system leveraging local regulatory frameworks to foster innovation and growth in digital currencies.
Conclusion
In summary, Tether’s launch of a Dirham-pegged stablecoin marks a significant step towards enhancing financial transactions and digital asset diversity in the UAE. By leveraging the regulatory framework of the UAE and collaborating with local partners, Tether aims to offer a stable and efficient digital representation of the AED. As crypto adoption in the region continues to surge, this new stablecoin is poised to play an essential role in the evolving financial landscape, making cross-border transactions and remittances more seamless and secure.