In a major move for the cryptocurrency industry in the Middle East, Tether, the world’s largest stablecoin provider, has announced plans to launch a new stablecoin pegged to the United Arab Emirates dirham (AED). This development comes as the UAE continues to position itself as a growing hub for digital assets and blockchain technology.
Tether’s new dirham-backed stablecoin aims to improve international trade and remittances in the region. The company is partnering with two UAE-based firms, Phoenix Group and Green Acorn Investments, to bring this project to life. This collaboration highlights the increasing interest in digital currencies from both global crypto players and local businesses in the UAE.
So, in less than a week we have got the news that:
– People in Dubai can get their salaries paid in crypto
– Tether is launching a Dirham AED stablecoinConnect the dots. It’s a straight line to crypto adoption 🇦🇪 pic.twitter.com/t5g8VOXsas
— Nic (@nicrypto) August 21, 2024
The new stablecoin will be fully backed by liquid reserves based in the UAE, ensuring its stability and value. This means that for every dirham-pegged token issued, there will be an equivalent amount of real dirhams held in reserve. This backing system is designed to provide users with confidence in the stablecoin’s value and stability.
Tether CEO Makes Comments on the Move
Paolo Ardoino, CEO of Tether, expressed enthusiasm about adding the dirham-pegged stablecoin to their lineup. He emphasized the UAE’s growing importance as a global economic center and believes the new stablecoin will be a valuable tool for users in the region.
The introduction of this dirham-backed stablecoin is expected to offer several benefits, including:
- Lower transaction fees for international trades and money transfers
- Protection against currency fluctuations
- Easier access to the benefits of the UAE dirham in digital form
This move by Tether aligns with the UAE’s broader push to embrace cryptocurrencies and blockchain technology. The country has seen a significant increase in crypto adoption since 2022, driven by the establishment of the Virtual Asset Regulatory Authority (VARA) in Dubai.
FSRA Approves Framework for Fiat-Referenced Tokens
In a related development, Abu Dhabi’s financial regulator, the Financial Services Regulatory Authority (FSRA), has proposed a new framework for regulating fiat-referenced tokens (FRTs), which are similar to stablecoins. This proposal shows the UAE’s commitment to creating a safe and regulated environment for digital assets.
These regulatory efforts, combined with Tether’s new dirham stablecoin, could significantly boost the UAE’s position in the global crypto market. They may attract more blockchain businesses and investors to the region, potentially making the UAE a leading destination for crypto innovation.