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Tether, the issuer of the largest stablecoin in the digital asset sector, announced on Wednesday that it is developing a new stablecoin pegged to the United Arab Emirates Dirham (AED), in partnership with UAE tech giant Phoenix Group and Green Acorn Investments.

“We are excited to announce this initiative to develop Tether’s Dirham-pegged stablecoin, expanding our range of stablecoin options,” said Paolo Ardoino, CEO of Tether.

Tether’s new Dirham-pegged stablecoin is one of the first stablecoins to seek regulatory approval under the UAE Central Bank’s new Payment Token Services Regulation.

“We are excited to partner with Tether to bring a UAE Dirham-pegged stablecoin to market and are confident in its potential to transform the digital economy for users in the region and beyond,” said Seyedmohammad Alizadehfard, Co-Founder and CEO of Phoenix Group.

Tether said each Dirham-pegged token will be fully backed by real AED reserves held in the UAE. With the new stablecoin, the company aims to expand its range of stablecoin offerings, which already include USDT, EURT, CNHT, MXNT, XAUT and aUSDT.

Tether’s Dirham-pegged stablecoin offers a secure and efficient way to use the Dirham in the digital world, the company noted. It also targets users looking to streamline international trade and remittances.

Tether expects the new product to reduce transaction costs compared to traditional methods and provide protection against currency fluctuations.

“Tether’s Dirham-pegged stablecoin will become an essential tool for businesses and individuals looking for a secure and efficient way to transact in the UAE Dirham, whether for cross-border payments, trading, or simply diversifying one’s digital assets,” Ardoino added.

The Dirham-pegged stablecoin follows the launch of Alloy, Tether’s digital asset backed by gold stored in Switzerland, in June.

In addition to diversifying its product offerings, the company has expanded into new blockchains. Tether recently revealed that it plans to launch the USDT stablecoin on the Celo Network and the Aptos blockchain.

Market potential

The global stablecoin market is booming, currently valued at $150 billion. Tether’s USDT alone has a market cap of over $115 billion.

Tether believes that the Dirham stablecoin will be valuable to individuals and businesses in the UAE and beyond. The UAE’s favorable regulatory environment creates an opportunity for the new stablecoin to play a role in the region’s digital financial future.

“The UAE is becoming a major global economic hub and we believe our users will find our Dirham-pegged token to be a valuable and versatile addition,” said Ardoino.

Crypto usage in the UAE has grown rapidly since 2022 thanks to supportive regulations, with Dubai and Abu Dhabi emerging as hubs for crypto and blockchain innovation.

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