Phoenix Group, Tether to launch UAE dirham-pegged stablecoin

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Abu Dhabi’s Phoenix Group has partnered with cryptocurrency firm Tether to launch a stablecoin pegged to the UAE dirham to tap into the growing demand for the Gulf currency while offering alternatives to the US dollar.

The global market for stablecoins is currently valued at $150bn and is set to grow exponentially to $2.8tn by 2028. The launch of the dirham-pegged stablecoin is set to revolutionise the digital assets landscape by providing a stable, reliable and secure digital currency.

Phoenix and Tether said in a joint statement that the dirham stable coin will be accessible globally and “fully backed” by liquid UAE-based reserves. It aims to “streamline international trade and remittances, reduce transaction fees, and provide a hedge against currency fluctuations”.

The new stablecoin aims to bridge the gap between traditional finance and the digital economy, offering a solution for investors, businesses, and everyday consumers seeking stability in the world of cryptocurrency and digital assets.

“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,” said Paolo Ardoino, CEO of Tether.

“Tether’s dirham-pegged stablecoin is set to become an essential tool for businesses and individuals looking for a secure and efficient means of transacting in the UAE dirham, whether for cross-border payments, trading, or simply diversifying one’s digital assets.”

Phoenix and Tether did not give a launch date for the UAE dirham-pegged stablecoin. Stablecoins are digital tokens designed to keep a constant value backed by traditional currencies such as the US dollar or euro.

Tether also provides stablecoins pegged to the euro, Chinese yuan, the Mexican peso and gold.

Meanwhile, the UAE is one of the fastest-growing cryptocurrency markets in the world. The Gulf state has been quick to enable cryptocurrency payments in areas such as real estate and school fees, boosting rates of adoption and transaction volumes while developing virtual asset regulation in both Abu Dhabi and Dubai.

Read: Here’s why MENA is world’s fastest-growing crypto market