Quick take:
- The companies did not provide a launch date, but Tether CEO Paolo Ardoino said licencing by the UAE Central Bank would take months.
- Tether’s USDT stablecoin dominates the market with a circulating supply of $117 million.
- The “world’s largest” blockchain company has also issued stablecoins pegged to the euro, the Chinese yuan, the Mexican peso, and to gold.
Tether is expanding its stablecoin dominance with a new product focused on the UAE. The “world’s largest blockchain company” on Wednesday announced it is teaming up with the Abu Dhabi-listed crypto-mining and blockchain conglomerate Phoenix Group and investment firm Green Acorn Investment to launch a new stablecoin pegged to the United Arab Emirates dirham (AED).
The UAE has emerged as one of the fastest-growing crypto hubs, with the country developing virtual asset regulation in both the capital Abu Dhabi and Dubai. The UAE has also enabled cryptocurrency payments in areas like real estate and school fees, which has accelerated the adoption of crypto in the region.
Tether CEO Paolo Ardoino sees the move as an attempt to create “optionality towards the US dollar”. According to Ardoino, the UAE dirham has the potential to become a dominant currency “as global trade shifts”.
“We see a lot of interest in holding AED (dirham) outside of the UAE,” he said, citing stability for the country and its currency as potential key drivers of demand.
Although a launch date was not provided, Ardoino said licencing by the UAE Central Bank would take months.
Once launched, the new stablecoin will join a growing portfolio of stablecoins offered by Tether including the most dominant in the space, the USDT, as well as, stablecoins pegged to the euro, the Chinese yuan, the Mexican peso, and gold.
Stablecoins seek to maintain the value of the crypto token 1:1 to the fiat currency they are pegged to. They have particularly become popular in cross-border payments as they reduce transfer fees.
According to Reuters, a statement announcing the launch said the dirham-pegged stablecoin aims to “streamline international trade and remittances, reduce transaction fees, and provide a hedge against currency fluctuations.”
Tether has been expanding its product offering to diversify to new markets. In April, Tether invested $200 million in a biotech startup Blackrock Neurotech, taking a majority stake.
The company has also secured a $100 million placement into Bitcoin mining company Bitdeer and could boost its stake by a further $50 million investment as reported in May. More recently, Tether launched Alloy by Tether, a tethered digital asset backed by Tether Gold.
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