Tether has announced the launch of a new stablecoin pegged to the United Arab Emirates Dirham (AED), an innovative move aimed at providing a more secure and efficient solution for transactions in the UAE, especially in the field of cross-border payments and transactions. As a stablecoin issuer, Tether's plan marks a further expansion of its digital asset portfolio.
It is reported that the stablecoin project pegged to the dirham is the result of cooperation between Tether and the UAE technology group Phoenix Group PLC, and has received strong support from Green Acorn Investments Ltd. The project will be carried out within the UAE's payment token service regulatory framework to ensure its compliance and security.
The newly launched dirham-pegged stablecoin provides UAE market participants with a digital currency option directly tied to their national currency, while demonstrating Tether’s relentless pursuit and commitment to global financial innovation.
Stablecoin pegged to the UAE dirham
The stablecoin is reportedly fully backed by the UAE Dirham (AED) and follows Tether’s high standards and strict requirements, ensuring its stability and market confidence.
The goal of this innovative product is to optimize international trade processes, simplify remittance operations, and provide investors with an effective hedge against currency fluctuations by digitizing the dirham. Its launch not only enriches Tether's existing list of fiat currency-backed tokens, such as USDT and EURT, but also marks the company's continued progress in financial innovation.
Tether CEO Paolo Ardoino expressed optimism about the potential impact of the stablecoin, noting that the UAE is becoming a global economic hub and believes that users will find value in the dirham-pegged token in a variety of transaction scenarios, including cross-border payments, transactions, and the diversification of digital assets.
At present, the total market value of stablecoins has reached 150 billion US dollars, of which USDT accounts for 115 billion US dollars. Industry analysis predicts that by 2028, the market size of the stablecoin industry is expected to grow to 2.8 trillion US dollars, showing its huge growth potential and market prospects.
Cryptocurrency adoption in the UAE
The UAE has made significant progress in cryptocurrency adoption since 2022, an achievement largely due to the establishment of the Virtual Assets Regulatory Authority (VARA). As the world's first independent cryptocurrency regulator, VARA provides a unique regulatory environment for cities such as Dubai and Abu Dhabi in the United Arab Emirates, making them the forefront centers of cryptocurrency development and blockchain technology innovation.
Interest in and usage of cryptocurrencies is surging in the Middle East, according to new data from Bitget Research. As of February 2024, the average daily volume of cryptocurrency traders in the region has exceeded 500,000. Of particular note, the UAE leads the region in per capita cryptocurrency adoption, recording a high of 106,111 daily active users in 2024 and achieving a record number of traders compared to the previous year A significant increase of 68%.
These data not only highlight the UAE's leadership in promoting cryptocurrency adoption, but also reflect the country's strong commitment to innovation and technological development. As cryptocurrency and blockchain technology continue to mature and gain popularity, the UAE is expected to continue to play an important role in the global fintech sector.
Conclusion:
With the launch of Tether's stablecoin pegged to the UAE dirham, we are witnessing how financial innovation and regulatory frameworks can work together to shape the UAE's new position in the global economy. This innovation not only provides market participants with a safe and efficient trading tool, but also reflects the UAE's leading position in cryptocurrency adoption and blockchain technology applications.
We look forward to seeing how this innovation will further promote the development of the financial ecosystem in the UAE and around the world, and how it will help businesses and individuals manage currency risks more effectively and achieve global mobility and value-added of assets. The story of the UAE is a model of the combination of financial innovation and regulatory wisdom, providing valuable experience and inspiration for the world.
