Tether Announces Dirham-Pegged Stablecoin to Enhance UAE Financial Ecosystem

Stablecoin issuer Tether plans to launch a new stablecoin pegged to the United Arab Emirates Dirham (AED), marking an expansion in its portfolio of digital assets.

Developed in partnership with UAE-based tech conglomerate Phoenix Group PLC and supported by Green Acorn Investments Ltd, this project will leverage the UAE’s regulatory framework for Payment Token Services.

UAE Dirham-Pegged Stablecoin

According to the official press release shared with CryptoPotato, the Dirham-pegged stablecoin will be backed by liquid AED reserves, adhering to Tether’s standards to ensure “stability and confidence.”

This new product aims to improve international trade, streamline remittances, and offer a hedge against currency fluctuations by providing a digital representation of the AED. The new Dirham-pegged stablecoin from Tether joins the company’s roster of other fiat-backed tokens, such as USDT and EURT.

Commenting on the potential impact, Tether CEO Paolo Ardoino said,

“The United Arab Emirates is becoming a significant global economic hub, and we believe our users will find our Dirham-pegged token to be a valuable and versatile addition. Tether’s Dirham-pegged stablecoin is set to become an essential tool for businesses and individuals looking for a secure and efficient means of transacting in the United Arab Emirates Dirham whether for cross-border payments, trading, or simply diversifying one’s digital asset.”

The stablecoin market is currently valued at $150 billion, with USDT representing over $115 billion of that total, as per the company’s estimates. Furthermore, the industry forecasts suggest that this sector could expand to $2.8 trillion by 2028.

Crypto Adoption in UAE

Crypto adoption in the United Arab Emirates has surged since 2022, primarily due to the creation of the Virtual Asset Regulatory Authority (VARA), the first independent regulator of its kind. This supportive regulatory landscape has turned cities like Dubai and Abu Dhabi into leading centers for crypto and blockchain innovation.

Recent figures from Bitget’s Research revealed a surge in crypto use in the Middle East, with the average number of daily traders surpassing 500,000 in February 2024. The UAE is the leader in per capita adoption, reaching a peak of 106,111 daily active users in 2024 and witnessing a 68% rise in daily traders compared to the previous year.