Tether Partners with Phoenix to Launch Dirham-Backed Stablecoin

Tether has announced plans to launch a new stablecoin backed by the United Arab Emirates Dirham (AED). This program was launched in cooperation with the UAE’s Phoenix Group and Green Acorn Investments to enhance remittance services.

The new stablecoin will be fully backed by UAE-based reserves so that the value will be equal to the AED.

Tether Expands into the UAE Market

USDT issuer Tether’s entry into the UAE market is a strategic decision that aims to harness the Middle East’s potential. The dirham-pegged stablecoin will give users a cheap and efficient method of accessing AED and hence reduce transaction costs while protecting against rate fluctuations.

Subsequently, this launch aligns with the goal to add stablecoins and meet the UAE market requirements.

Concurrently, the UAE witnessed an uptick in the use of crypto, boosted by measures such as Virtual Asset Regulatory Authority in Dubai. The collaboration with Phoenix Group, a technology companies in Abu Dhabi, aims at offering the residents of the region a safe and convenient means of conducting transactions in digital assets.

Benefits for International Trade and Remittances

The dirham-pegged stablecoin will revolutionize international trade and remittances to make cross-border transactions easier. Moreover, Tether met all the requirements for stability, providing clear reserve information to show that the stablecoin is fully backed. As a result, due to the low transaction fees, individuals and large companies can use the stablecoin to conduct international business.

Paolo Ardoino, the CEO of Tether, stressed the significance of this launch, mentioning that the UAE is one of the fastest-growing economies in the world. He noted the stablecoin tied to the dirham will be a welcome addition to the ones provided by Tether, giving users more ways to manage their assets.

In addition, Tether minted $3 billion USDT in the last week, a plan to act proactively in terms of liquidity. This minting may replenish the supply in preparation for a rise in orders. This is in line with Tether’s plan of expanding the stablecoin market and providing enough supply for different trading platforms.

Aligning with the UAE’s Crypto Boom

The launch of the dirham-backed stable coin aligns with the UAE’s continued push towards cryptocurrencies. Due to favorable laws like VARA, the country has witnessed the rise of crypto investments since 2022. Moreover, the UAE has been progressive in regulating crypto assets and adopting blockchain.

Tether’s decision to release stablecoins in the UAE follows the predicted rapid increase in the global stablecoin market. Analysts expect this market to grow to $2.8 trillion by 2028 as more investors seek reliable digital currencies. Given the UAE’s embrace of crypto and Tether’s compliance with the reserve standards, the dirham-tied stablecoin’s potential to thrive is high.

Speaking about the partnership, Phoenix Group co-founder Seyed Mohammad Alizadehfard said that the company aims to provide innovative financial services. According to him, the partnership will strengthen the UAE’s position as a leading player in the global cryptocurrency market.