Tether to launch stablecoin tied to UAE dirham

Tether to Launch Dirham-Pegged Stablecoin Amid Growing Gulf Crypto Demand

Tether, a well-known stablecoin with a dollar peg (USDT), is about to introduce a stablecoin with a UAE dirham (AED) peg. In addition to offering a substitute for the US dollar in international commerce, the measure attempts to meet the rising demand for Gulf currencies.

Tether’s strategic expansion into the Gulf currency
Tether dominates the stablecoin market with its USDT token, which accounts for about $117 billion of the $169 billion global market. The dirham-pegged stablecoin is a strategic expansion into a region that could become a global crypto hub, diversifying options for investors and businesses.

Advantages of a dirham-pegged stablecoin
The AED-pegged stablecoin is expected to improve international trade, lower transaction fees and reduce currency fluctuations, especially in emerging markets where US dollars are less accessible. This coincides with the UAE’s rapid cryptocurrency innovation.

Collaboration with UAE based companies
The new stablecoin will be fully backed by UAE reserves, with Tether partnering with Abu Dhabi’s Phoenix Group and backed by Green Acorn Investments. While the blockchain platform is still being finalized, it is expected to take a few months to obtain a license from the UAE Central Bank.

Blockchain and Regulatory Considerations
Regulators have raised concerns about stablecoin risks, particularly the systemic financial risks posed by sudden transitions to traditional currencies. The CEO of Phoenix Group noted that the choice of blockchain will be critical for security and scalability.

Focus on emerging markets
Tether’s AED-pegged stablecoin aims to address limited US dollar access in emerging markets such as Argentina, Brazil and Turkey. The move will boost Tether’s presence in the Gulf and give global traders more options as the dirham gains traction.

Tether’s new dirham-pegged stablecoin marks the UAE’s growing role in global finance. It provides an alternative to the US dollar, supports the UAE’s digital asset ambitions and offers new opportunities for cross-border transactions.