Key Insights:
- Tether partners with UAE-based firms to launch a stablecoin pegged to the dirham, enhancing cross-border trade and remittances.
- The UAE’s growing crypto hub status fuels demand for stablecoins, driven by new regulations and increased adoption in real estate and education.
- The new dirham-pegged stablecoin aims to offer an alternative to the US dollar, reflecting the UAE’s stable currency and global trade shift.
Tether is expanding its reach in the global stablecoin market by partnering with the Abu Dhabi-based Phoenix Group and Green Acorn Investment, to launch a new stablecoin pegged to the United Arab Emirates dirham (AED). This collaboration highlights the growing significance of the UAE as a key player in the global cryptocurrency market.
Tether’s Dominance in the Stablecoin Market
Tether’s USDT stablecoin continues to dominate the market with a circulating supply of $117 million. The company has also successfully introduced stablecoins pegged to various other currencies, including the euro, the Chinese yuan, the Mexican peso, and even gold. With this new product, Tether aims to strengthen its portfolio and further solidify its market dominance.
Expanding into the UAE Crypto Market
The UAE has emerged as a rapidly growing hub for cryptocurrencies, with virtual asset regulations taking shape in both Abu Dhabi and Dubai. The country has already embraced cryptocurrency payments for sectors such as real estate and education, significantly boosting crypto adoption. The launch of the dirham-pegged stablecoin is a strategic move by Tether to tap into this burgeoning market and offer an alternative to the US dollar.
According to Tether CEO Paolo Ardoino, the UAE dirham has the potential to become a dominant currency as global trade dynamics shift. The dirham’s stability and the UAE’s strong economic position make it an attractive option for investors and businesses alike. Ardoino emphasized that there is considerable interest in holding the dirham outside of the UAE, citing the currency’s stability as a key driver of demand.
Licensing and Future Plans
Specific information about the launch date of the dirham-pegged stablecoin has not been revealed but Ardoino said that the licensing would take place with the UAE Central Bank will take several months. This new stablecoin will be added alongside the current array of stablecoins that are already offered by the Tether company, thus improving the company’s inventory and raising it higher in the international cryptocurrency market.
Stablecoins may be defined as cryptocurrencies that are built to have a fixed rate tied to the value of fiat money. They have therefore gained a lot of acceptance in cross-border payments since they can minimize the costs of transfer and promote overseas trade. The new dirham-pegged stablecoin could also act as a hedge against currency volatility and a faster way to make cross-border payments and remit money back home in a statement from the company.
Tether’s Broader Investment Strategy
A shift in the strategy of offering Tether products is to diversify the products and also to expand the market to different geographical locations and this we see Tether has done by expanding to the UAE market. In April, the company pumped $200 million to take a majority stake in Biotech startup Blackrock Neurotech.
Also, Tether lavished $100 million on placement to Bitcoin mining firm Bitdeer and may up its investment to $50 million. In the later period, Tether himself launched Alloy by Tether, a new digital asset that is associated with Tether Gold, which indicates Tether’s constant endeavor to innovate and expand the reach of its services.
Personal Note From MEXC Team
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