Tether, a global digital asset company and the issuer of USDT stablecoin announced its plans to launch a new stablecoin pegged to the United Arab Emirates Dirham. The company is set to collaborate with UAE’s multi-billion dollar tech conglomerate, Phoenix Group, with the support of Green Acorn Investments.
The launch of a Dirham-pegged stablecoin in the UAE adds to the list of several stablecoin products from Tether, such as EURT, CHHT, MXNT, and XAUT. Cryptopolitan spoke to Munaf Ali, Co-Founder and CEO of Phoenix Group to understand the role that they are playing in this launch.
Phoenix Group will acquire regulatory approvals
Ali noted that Phoenix Group is working collaboratively with all UAE stakeholders to ensure compliance with regulatory requirements within the UAE. He noted that the operating license will be sought from the UAE Central Bank which recently announced its payment token services regulation.
We have a significant stake in this venture along with Green Acorn investments. Phoenix Group is the only MENA listed crypto blockchain player on UAE’s stock exchange, ADX, and as such is the most suitable and trusted partner for Tether.
Munaf Ali – Co-Founder and CEO of Phoenix Group
Set to launch in 2025, once the regulatory approvals have been received, the Tether stablecoin will be a digital representation of the UAE Dirham with each token fully backed by liquid UAE-based reserves.
Asking Ali about the liquidity of the upcoming AED stablecoin, he explained, “The liquidity for the upcoming AED stablecoin with Tether will definitely be much more than half a billion AED. Today USDT has $120 billion market capital, we expect the AED stablecoin to be 10-20% of this in the coming two years.”
AED Stablecoin will transcend the UAE
While Tether announced that the Dirham-pegged stablecoin will provide users with a seamless and cost-effective means of accessing the benefits of the AED while leveraging the transparency and efficiency of blockchain technology, Ali believes that the role of AED stablecoin will transcend the UAE itself.
He explains, “One of the biggest reasons as well as benefits of launching an AED stablecoin is that even users outside of UAE can utilize it either for payments or hedge it against currency fluctuations. We believe that the AED stablecoin will become an essential tool for businesses and individuals looking for secure and efficient means of transaction inside UAE and outside.”
Tether will be delivering the secure, transparent infrastructure as they have done with their other solutions.
Phoenix Group is the only Blockchain and crypto entity listed on the Abu Dhabi Exchange (ADX). The company hold a 3% share of the global Bitcoin mining market and is a main investor in M2, the Abu Dhabi-regulated crypto exchange. The partnership with Tether for a UAE-pegged stablecoin is yet another milestone for the group.
The Phoenix partnership could be the biggest yet for Tether in the UAE. Tether has previously partnered with UAE and Turkey-based Fuze, a leading digital assets infrastructure provider, to establish the terms of collaboration on educational initiatives, with a particular focus on Turkey and the Middle East, as well as with the RAK DAO digital assets Oasis.
