Tether Announces Development of UAE Dirham-Pegged Stablecoin

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As a seasoned crypto investor with over a decade of experience navigating the volatile world of digital assets, I find Tether’s latest move to introduce a Dirham-pegged stablecoin an exciting development. Having witnessed the rise and fall of numerous cryptocurrencies, I appreciate the value that stablecoins like USDT bring to the table – providing stability amidst the chaos.

On August 21, Tether, a company that issues stablecoins like USDT, revealed intentions to launch a new stablecoin tied to the UAE Dirham (AED). This upcoming stablecoin is being developed alongside Phoenix Group PLC, a tech group based in the UAE, and with backing from Green Acorn Investments Ltd. This is simply another stablecoin addition to Tether’s expanding collection.

Tether’s collection of stablecoins currently features various tokens that are tied to different global currencies. These include USDt linked with the U.S. dollar, EURT connected to the Euro, CNHT associated with the Chinese Yuan, MXNT related to the Mexican Peso, XAUT pegged to gold, and aUSDT attached to the Australian Dollar.

As per Tether, every Dirham-linked token is guaranteed to have an equivalent value stored as liquid assets within the UAE. This ensures that the digital coin preserves its worth, consistently matching the AED’s value. This method adheres to Tether’s previously set reserve practices.

The upcoming Dirham-linked digital coin is anticipated to bring numerous benefits for its users, especially in aspects like international commerce, money transfers, and online payments. Utilizing blockchain technology, this stablecoin aims to simplify transactions while keeping costs low, all the while providing a protective barrier against currency rate changes.

Paolo Ardoino, Tether’s CEO, stressed the strategic significance of this project, pointing out that the UAE is swiftly becoming a major player in the global economy. Ardoino voiced his optimism that the token tied to the Dirham would be a beneficial expansion for Tether, offering users a reliable and streamlined way to conduct transactions using AED. He underscored its potential benefits for cross-border payments, trading, and diversifying digital asset portfolios.

According to Tether, the United Arab Emirates (UAE) has seen substantial increases in cryptocurrency adoption since 2022, largely due to forward-thinking regulatory advancements like the creation of the Virtual Asset Regulatory Authority, the globe’s first standalone crypto regulator. The advantageous regulatory landscape in cities such as Dubai and Abu Dhabi has made the UAE a leading global destination for innovation in digital assets and blockchain technology.

Tether’s DHAR stablecoin is planning to obtain a license under the UAE Central Bank’s latest Payment Token Services Regulation, aiming to align it more closely with the local financial system. This step could strengthen the position of the stablecoin within the UAE’s financial sector and encourage wider acceptance of digital currencies in the region.

As a crypto investor, I’ve recently taken note of the remarkable growth of the stablecoin market, currently estimated at around $150 billion. Among these, Tether’s USDt stands out with a staggering market cap exceeding $115 billion. Looking forward, industry experts predict that this market could skyrocket to an astounding $2.8 trillion by 2028, underscoring the increasing influence of stablecoins within the global financial sphere.

Seyedmohammad Alizadehfard, Co-Founder and Group CEO of Phoenix Group, showed excitement about the collaboration with Tether. He believes that the Dh-backed stablecoin has a significant transformative impact on the digital economy in the region. Alizadehfard emphasizes that this partnership demonstrates both companies’ dedication to innovation and quality, reflecting their focus on creating financial solutions tailored to changing customer needs. Furthermore, he mentioned that Abu Dhabi’s progressive attitude towards blockchain technology and digital assets makes it an excellent starting point for launching this new stablecoin.

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2024-08-21 18:21