Tether, the developer of the world’s largest stablecoin, has announced plans to launch a new digital token linked to the UAE dirham (AED) in collaboration with Abu Dhabi-listed Phoenix Group (PHX). This move marks Tether’s expansion in introducing stablecoins pegged to new fiat currencies, providing more options for users seeking stable digital assets.
Stablecoins, such as Tether’s USDT, are digital assets pegged to fiat currencies, providing a means of protection against volatility that often affects cryptocurrencies such as Bitcoin (BTC). USDT, which is pegged to the US dollar, dominates the stablecoin market with a capital of over $117 billion, making up nearly 70% of the market.
Tether is the global leader in stablecoins and has established itself as a major player in the digital economy since the launch of its popular stablecoin USDT in 2014. USDT is a digital currency pegged to the US dollar, and aims to provide a stable storage medium for value in the volatile cryptocurrency world. With a market capitalization of over $117 billion, USDT accounts for about 70% of the total stablecoin market, making it the most widely used stablecoin in the world.
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Widely used in trading and remittances, USDT is a reliable way to connect the digital and traditional worlds, where users can hedge cryptocurrency volatility by using it. The success of USDT has contributed to the growth of the stablecoin market in general, as these currencies have come to play an important role in enabling digital financial operations.
Despite USDT’s dominance, Tether didn’t stop there. In an effort to expand its reach and offer new financial solutions to users in different markets, Tether has announced plans to launch a new stablecoin pegged to the UAE dirham (AED). The move comes in partnership with Phoenix Group, a company listed on the Abu Dhabi Stock Exchange that specializes in investments and financial technologies.
Phoenix Group (PHX) is a leading fintech investment entity in the Middle East, providing innovative solutions in the cryptocurrency sector. The company has a strong reputation in the UAE market thanks to its strategic partnerships and pioneering initiatives, making it an ideal partner for Tether in launching the new dirham-linked stablecoin.
The Digital Stable Dirham, which will be launched under a regulatory umbrella from the UAE Central Bank, reflects Tether’s commitment to expanding the use of stablecoins globally. The move comes at a time when Dubai and Abu Dhabi are becoming major hubs for innovation in cryptocurrencies and blockchain. Tether will seek a license for the digital dirham stable in accordance with the payment code service regulations announced by the UAE Central Bank last June, which could give it a boost in this growing market.
While stablecoins pegged to currencies other than the US dollar are still relatively small compared to USDT, the growing demand for stable and reliable financial solutions in emerging markets may boost the popularity of these currencies. For example, Tether has a stablecoin pegged to the euro (EURT), with a market capitalization of about $30 million. Although much smaller than USDT, it represents a step towards diversifying stable digital assets and meeting the needs of different markets.
The move is expected to boost the use of stablecoins in U.A.E. and beyond, resulting in
