Digital currency linked to the UAE Dirham 🇦🇪
Phoenix and Tether Collaborate to Launch Digital Currency Linked to UAE Dirham
Tether, the developer of the world’s largest stablecoin, has announced plans to launch a new digital token pegged to the United Arab Emirates dirham (AED) in collaboration with Abu Dhabi-listed Phoenix Group (PHX). The move marks Tether’s expansion into offering stablecoins pegged to new fiat currencies, providing more options for users looking for stable digital assets.
Stablecoins, like Tether’s USDT, are digital assets pegged to fiat currencies, providing a hedge against the volatility that often affects cryptocurrencies like Bitcoin (BTC). USDT, which is pegged to the US dollar, dominates the stablecoin market with a market capitalization of over $117 billion, accounting for nearly 70% of the market.
Tether is the world’s leading stablecoin and has established itself as a major player in the digital economy since launching its popular stablecoin USDT in 2014. USDT is a digital currency pegged to the US dollar and aims to provide a stable store of value in the volatile world of cryptocurrencies. With a market cap of over $117 billion, USDT represents around 70% of the total stablecoin market, making it the most widely used stablecoin in the world.
USDT is widely used in trading and money transfers, and is a reliable way to bridge the digital and traditional worlds, as users can hedge against cryptocurrency volatility by using it. The success of USDT has contributed to the growth of the stablecoin market in general, as these currencies have become an important role in enabling digital financial transactions.
Despite USDT’s dominance, Tether is not stopping there. In an effort to expand its reach and offer new financial solutions to users in different markets, Tether has announced plans to launch a new stablecoin pegged to the UAE dirham (AED). The move comes in partnership with Phoenix Group, an Abu Dhabi-listed investment and fintech company.
Phoenix Group (PHX) is a leading investment and fintech entity in the Middle East, working to provide innovative solutions in the cryptocurrency sector. The company has a strong reputation in the UAE market due to its strategic partnerships and pioneering initiatives, making it an ideal partner for Tether in launching its new dirham-pegged stablecoin.
The digital stablecoin, which will be launched under the regulatory umbrella of the UAE Central Bank, reflects Tether’s commitment to expanding the use of stablecoins globally. The move comes at a time when Dubai and Abu Dhabi have become major hubs for innovation in cryptocurrencies and blockchain. Tether will seek a license for the digital stablecoin under the Payment Token Service Regulations announced by the UAE Central Bank in June, which could give it a significant boost in this growing market.
While stablecoins pegged to currencies other than the US dollar are still relatively small compared to USDT, the growing demand for stable and reliable financial solutions in emerging markets could boost their popularity. For example, Tether has a stablecoin pegged to the euro (EURT), with a market cap of around $30 million. While much smaller than USDT, it represents a step towards diversifying stablecoins and catering to different markets.
This move is expected to boost the use of stablecoins in the UAE and beyond, opening the way for more innovation in the digital financial sector and strengthening the region’s position as a global hub for innovation in this field.
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