Tether (USDT-USD), the heavyweight in the stablecoin arena, is setting its sights on a new frontier by planning to launch a stablecoin pegged to the United Arab Emirates (UAE) dirham. This move is a big step beyond its usual U.S. dollar peg and aims to tap into the growing interest in Gulf currencies.
What’s the Plan?
Tether is teaming up with Phoenix Group, an Abu Dhabi-based crypto and blockchain company, to bring this new stablecoin to life. They announced their collaboration at a Dubai event, but they haven’t nailed down a launch date yet. Paolo Ardoino, Tether’s CEO, mentioned that the next hurdle is getting the green light from the Central Bank of the UAE, which could take a few months.
This new stablecoin will fall under the UAE Central Bank’s Payment Token Services Regulation, a new regulatory framework introduced in June. This could provide the stablecoin with a strong base, especially with Dubai and Abu Dhabi emerging as key players in the crypto scene.
Stablecoins Venture Beyond the Dollar
Currently, most major stablecoins are pegged to the U.S. dollar, with Tether’s USDT leading the pack and boasting a market cap of over $117 billion. In contrast, stablecoins tied to other currencies, like Tether’s euro-pegged token (EURT), are much smaller in comparison. By introducing a dirham-pegged stablecoin, Tether could help meet regional demand in the UAE and provide an alternative to the predominantly U.S. dollar-based stablecoin market.
As Tether works through the regulatory process and prepares for launch, the success of this new stablecoin will depend on how well it’s received and how smoothly it incorporates UAE regulations.
