Tether Announces Dirham Pegged Stablecoin to Improve UAE Financial Ecosystem

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

Developed in partnership with UAE technology conglomerate Phoenix Group PLC and supported by Green Acorn Investments Ltd, this project will leverage the UAE’s regulatory framework for payment token services.

Stable currency pegged to United Arab Emirates dirhams

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

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

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

“The UAE is becoming a major global economic hub and we believe our users will find our Dirham-linked token a valuable and versatile addition. Tether’s Dirham-linked stablecoin will become an essential tool for businesses and individuals looking for a secure and efficient means of transacting in UAE Dirham, whether for cross-border payments, trading or simply diversifying their digital assets.

The stablecoin market is currently valued at $150 billion, with USDT accounting for more than $115 billion of that total, according to the company’s estimates. Additionally, industry forecasts suggest that this sector could expand to $2.8 trillion by 2028.

Adoption of Cryptography in the United Arab Emirates

Crypto adoption in the UAE has increased since 2022, mainly 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 hubs for crypto and blockchain innovation.

Recent figures from Bitget’s Research revealed an increase in the use of cryptocurrencies in the Middle East, with the average number of daily traders exceeding 500,000 by February 2024. The United Arab Emirates is the leader in adoption per capita , reaching a peak of 106,111 daily active users by 2024 and witnessing a 68% increase in day traders compared to the previous year.

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