The creator of stablecoins, Tether, has announced plans to introduce a stablecoin linked to the dirham of the United Arab Emirates.
The world’s largest stablecoin issuer, Tether Inc., said on August 21 that the new stablecoin would be introduced in association with Phoenix Group PLC, an IT behemoth with headquarters in the United Arab Emirates, and Green Acorn Investments Ltd.
The new asset will be issued under the Payment Token Services Regulation, which the Central Bank of UAE enacted in June, and will be backed 1:1 by liquid reserves based in the United Arab Emirates.
However, the precise launch date has not been revealed. According to the press announcement, Tether will pursue a license under this system to guarantee compliance.
The announcement claims that since the Virtual Asset Regulatory Authority was established in 2022, there has been a significant increase in the use of cryptocurrencies in Dubai.
The autonomous regulatory organisation, known as VARA, is in charge of regulating, licensing, and governing the cryptocurrency industry.
Tether anticipates that the new stablecoin will serve as an affordable substitute for enjoying the “benefits of the AED” by assisting in cross-border transactions and remittances and serving as a “hedge against currency fluctuations.”
Tether CEO Paolo Ardoino anticipates that the stablecoin will become a “crucial tool” for companies and people searching for a “secure and efficient means of transacting” through the dhiram. Paolo Ardoino stated:
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.”
The future stablecoin will be added to the existing fiat-pegged stablecoins that Tether has created throughout time.
The stablecoin issuer introduced the euro-backed stablecoin EURT in 2020 and the Chinese yuan-backed CNHT two years later.
However, Tether’s major asset, with a market valuation of more than $117 billion, or over 70% of the market, continues to be the biggest stablecoin globally.
The industry leader, Tether, has been under fire for potential abuse of USDT by sanctioned organisations and other illegal applications.
In an attempt to manage USDT transactions in the secondary market, Tether teamed up with blockchain analytics company Chainalysis to allay these worries.
