As the world debates cryptocurrency regulation, some market developers are looking to expand their reach. This is the case with the cryptocurrency company Tether, which recently announced the launch of a new stablecoin. The asset will have its value pegged to the dirham, which is the official currency of the United Arab Emirates (UAE).
Tether’s move takes into account the current demand for the UAE currency. At the moment, several countries with high cryptocurrency adoption are interested in alternatives to the U.S. dollar. Consequently, they are also interested in digital assets pegged to the dirham.
What are stablecoins, and why might they be interesting?
Stablecoins are digital assets and often serve as a medium of exchange. Unlike typical cryptocurrencies, the price of stablecoins tends to remain stable because they are pegged to fiat currencies. Some of these cryptocurrencies are indexed to the euro, others to the U.S. dollar, and so on. Any centralized currency can have an indexed stablecoin.
This type of currency has been receiving a lot of attention lately, especially from investors looking for a fast and decentralized payment method. Additionally, some traders are betting on stablecoins to buy tokens like Bitcoin, which are outside the traditional trading system, thus avoiding government oversight.
Currently, Tether operates the largest stablecoin in the market. The company’s token is USDT, designed to maintain a value pegged to the dollar. This means the $1.00 mark cannot be reduced or exceeded.
Very excited for the UAE Dirham-Pegged stablecoin.
The opportunity is immense. https://t.co/ogepSRyGtb pic.twitter.com/ujruBJLW2o— Paolo Ardoino 🤖🍐 (@paoloardoino) August 21, 2024
According to Paolo Ardoino, Tether’s CEO, the goal is to create an alternative to the dollar that is easy to circulate. In this way, USDT and other stablecoins have the potential to continue gaining public attention.
About the new Tether asset pegged to the UAE dirham
Ardoino was responsible for announcing the decision to launch a new stablecoin pegged to the centralized currency of a Gulf country. The announcement was made recently during an event in Dubai. On that occasion, the executive added that he believes in the potential of the asset and the UAE currency.
He believes the dirham could become one of the market’s preferred currencies, as there is a trend of change in the global market. Thus, Tether has a strong interest in maintaining the currency outside its country of origin.
Another key factor in the decision to launch the new stablecoin is the United Arab Emirates’ economy. Paolo mentioned at the event that the country offers stability and security in its public finances. The dirham is the largest currency in the Persian Gulf and has good potential for stability.
There is also an effort by the UAE to attract cryptocurrency investors. The country aims to become a global hub as competition in the Gulf increases. In this effort, the government has been quick in decision-making and is allowing cryptocurrency payments in various sectors.
Today, investors in the country can pay for real estate investments, school tuition, and other routine bills with digital assets. As a result, the adoption rate of cryptocurrencies has significantly increased in the country. Furthermore, the government is working on developing digital asset regulation and increasing circulation in both the capital, Abu Dhabi, and Dubai.
The United Arab Emirates stablecoin is set to hit the market soon
Last Wednesday, Tether announced the launch of the stablecoin pegged to the dirham. The company claims that the asset will be fully backed by liquid reserves based in the United Arab Emirates.
The assets are expected to enter the market soon. They will be developed in collaboration with another company. Tether’s partner in the project will be the Phoenix Group, a cryptocurrency, mining, and blockchain economic group. The company is based in Abu Dhabi and is supported by other investment companies, such as Green Acorn.
Tether to launch UAE Dirham-pegged stablecoin with Phoenix Group
Tether, the issuer of USDT, has announced plans to develop a new stablecoin pegged to the UAE Dirham (AED) in collaboration with UAE-based tech conglomerate Phoenix Group and Green Acorn Investments, Decrypt…
— CoinNess Global (@CoinnessGL) August 21, 2024
The Phoenix Group was founded in 2017 by Bijan Alizadeh Fard and Munaf Ali. Today, it is present in various markets and includes over 23 companies. There are nine mining operations spread across the United States, Canada, and the United Arab Emirates. Among the company’s ventures is a $2 billion mining farm, considered the largest in the world in this sector.
Tether is focusing on emerging markets and is set to gain prominence with this strategy
In a recent interview with Reuters, Ardoino stated that Tether’s growth is linked to emerging countries. This is because the asset has been offered as an alternative to the dollar in places like Brazil, Argentina, Turkey, and Vietnam. In addition to being developing countries, the U.S. dollar can often be scarce in these locations.
