Tether to Launch New Dirham-Pegged Stablecoin

Tether, the company behind the $114 billion USDT token, plans to launch a new stablecoin pegged to the United Arab Emirates (UAE) dirham.

The yet-to-be-named stablecoin will be rolled out in collaboration with UAE-based tech giants Phoenix Group PLC and Green Acorn Investments Ltd. While the companies did not provide a specific launch date, Tether CEO Paolo Ardoino stated that obtaining licensing from the Central Bank of the UAE will be the next step, which could take a few months.

The Dirham-pegged stablecoin will be fully backed by liquid UAE-based reserves, adhering to Tether’s reserve standards to ensure stability and trust in its value, Ardoino said in a press release.

The new token is expected to streamline international trade and remittances, reduce transaction fees, and provide a hedge against currency fluctuations.

The UAE’s central bank has already paved the way to regulate cryptocurrencies pegged to real assets. In June, it approved a plan to oversee and license stablecoin arrangements, specifically those backed by the UAE dirham.

While the details are still being ironed out, this move is part of the UAE’s push to become a leader in the crypto space under its Financial Infrastructure Transformation Programme.

Currently, stablecoins not backed by the dirham are regulated by Dubai’s Virtual Assets Regulatory Authority (VARA). Although some questions remain regarding how existing payment service providers will be affected, the proposed framework establishes a clear path for regulated stablecoins in the UAE.

Tether’s expansion into the UAE market aligns with its efforts to broaden its services beyond USDT, the largest stablecoin by market value and a critical element of the digital asset ecosystem.

The company has recently launched USDT on the Aptos blockchain, reducing gas fees to “only a fraction of a penny,” according to a statement made earlier this week.

Tether’s USDT is supported on multiple blockchains, with Tron leading the way at $60.73 billion in net circulation, followed by Ethereum at $52.59 billion.