Stablecoin issuer Tether has disclosed plans to launch a stablecoin pegged to the United Arab Emirates dirham.
In an August 21 announcement, Tether Inc. said the stablecoin would be launched with Phoenix Group PLC, a UAE-based tech giant, and Green Acorn Investments Ltd.
While the launch timeline wasn’t disclosed, the asset will be backed 1:1 by liquid UAE reserves and issued under the Payment Token Services Regulation by the Central Bank of UAE. Tether will seek licensing to ensure compliance.
Dubai has seen a surge in cryptocurrency use since establishing the Virtual Asset Regulatory Authority (VARA) in 2022. VARA oversees licensing, regulation, and governance of the cryptocurrency sector.
Tether expects the new stablecoin to facilitate international trade and remittances and act as a hedge against currency fluctuations.
Paolo Ardoino, CEO of Tether, said the stablecoin will be “an essential tool” for businesses and individuals seeking a “secure and efficient means of transacting” in dirhams.
"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."
— Paolo Ardoino
The upcoming stablecoin will join other fiat-pegged stablecoins by Tether, such as the euro-backed EURT and the Chinese yuan-backed CNHT.
Tether’s flagship asset, USDT, remains the largest stablecoin with a market capitalization of over $117 billion, holding nearly 70% of the market share.
Despite market leadership, Tether has faced criticism for potential misuse of USDT by sanctioned entities and other illicit activities. To address this, Tether partnered with blockchain analytics firm Chainalysis to oversee USDT transactions in the secondary market.
