ALBAWABA – Tether, a cryptocurrency stablecoin company, announced on Wednesday its plans to launch a new stablecoin pegged to the United Arab Emirates (UAE) dirham.
Stablecoin pegged to UAE's dirham
Tether, the company that runs the world's biggest stablecoin pegged to dollar token (USDT) and designed to maintain a value of $1, said this move aims to benefit from the high demand for the Gulf currency and to provide US dollar alternatives globally.
Paolo Ardoino, CEO of Tether, said: "The main purpose is actually creating an optionality towards the U.S. dollar.” Ardoino added that UAE’s dirham would become a preferred currency as global trade shifts. "We see a lot of interest in holding AED (dirham) outside of the UAE." he said.
UAE’s dirham will become a preferred currency as global trade shifts. (Shutterstock)
During a recent event in Dubai, UAE, Tether, and Phoenix Group, an Abu Dhabi-listed cryptomining and blockchain conglomerate company, announced the launch of the new stablecoin in a joint collaboration. Ardoino said the launching date is not set yet but the company is currently planning to obtain a license from the Central Bank of the UAE.
According to the statement issued by Tether, the new stablecoin aims to "streamline international trade and remittances, reduce transaction fees, and provide a hedge against currency fluctuations."
On the other hand, the UAE is thriving to become a global hub for the cryptocurrency industry. The country enabled cryptocurrency payments in diverse sectors like real estate and educational fees while formulating regulations for virtual assets in Dubai and Abu Dhabi.
It is worth noting that stablecoins are known as "digital tokens" and are used to maintain the value of conventional currencies like the euro and the US dollar. Stablecoins have seen a big boost recently as a form of transactions and among cryptocurrency traders.
