Tether, the developer behind the world’s largest stablecoin, plans to introduce a new token pegged to the United Arab Emirates dirham (AED) in collaboration with Abu Dhabi-listed crypto conglomerate Phoenix Group and Green Acorn Investments.
The move marks Tether’s expansion into non-dollar stablecoins, aiming to leverage the UAE’s growing status as a global crypto hub.
Stablecoins, which are digital assets pegged to fiat currencies, offer a hedge against the volatility of cryptocurrencies like Bitcoin. Tether’s USDT, the largest stablecoin, dominates the market with a capitalization exceeding $117 billion, accounting for nearly 70% of the stablecoin market.
In contrast, stablecoins pegged to other fiat currencies, such as Tether’s euro-pegged EURT, have a much smaller market presence. The introduction of a dirham-pegged stablecoin could help diversify Tether’s offerings and cater to the demand for Gulf currencies.
Tether plans to seek licensing for the new stablecoin under the UAE Central Bank’s recently announced Payment Token Services Regulation, which could provide a boost given Dubai and Abu Dhabi’s reputations as crypto-friendly cities.
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Tether CEO Paolo Ardoino comments: “The UAE is becoming a significant global economic hub, and we believe our users will find our dirham-pegged token to be a valuable and versatile addition.” He highlighted the stablecoin’s role as a secure and efficient tool for cross-border payments, trading, and diversifying digital assets.
The dirham-pegged stablecoin will join Tether’s existing range of fiat-pegged tokens, including USDT and EURT, further cementing Tether’s position as the largest issuer of stablecoins by market capitalization. Tether, which is owned by Hong Kong-headquartered Ifinex, also provides a breakdown of its reserves, as well as a complete list of reserve custodians.
However, other stablecoins under Tether’s purview, such as Tether Gold (XAUT), Tether EURt (EURT), Mexican Peso Tether (MXNT), and Tether Chinese Yuan (CNHT), do not enjoy the same level of liquidity cushion as USDT. These stablecoins lack balances to maintain a 1:1 peg in times of crisis, as mentioned in the report.
