tl;dr
Tether has announced plans to launch a stablecoin pegged to the United Arab Emirates Dirham (AED), fully backed by liquid reserves in the UAE. The move aims to boost liquidity in the crypto market and provide more choices for traders, potentially impacting Bitcoin's price. The UAE's supportive stanc...
Tether has announced plans to launch a stablecoin pegged to the United Arab Emirates Dirham (AED), fully backed by liquid reserves in the UAE. The move aims to boost liquidity in the crypto market and provide more choices for traders, potentially impacting Bitcoin's price.
The UAE's supportive stance on cryptocurrency and blockchain aligns with Tether's interest in the region. Regulatory frameworks and licensing requirements for digital asset businesses are being established in the UAE, with the stablecoin industry showing significant growth and revenue generation. Tether's USDT remains dominant in the market.
Tether has partnered with Phoenix Group PLC, a UAE-based multi-billion dollar technology conglomerate, along with support from Green Acorn Investments Ltd., to launch a stablecoin pegged to the UAE Dirham (AED). The new token will join Tether's existing stablecoin offerings, including USDT, EURT, CNHT, MXNT, XAUT, and aUSDT.
Tether's move is aimed at boosting liquidity in the crypto market and offering more choices for traders. This development could positively impact the broader cryptocurrency ecosystem by attracting more regional investors and businesses. Additionally, given Bitcoin's historical positive correlation with USDT's market cap, this expansion could potentially drive Bitcoin's price as well.
Tether's interest in the UAE aligns with the region's supportive stance on cryptocurrency and blockchain technology. The UAE has been proactive in establishing regulatory frameworks to oversee the use of digital assets. The UAE has solidified its reputation as a crypto-friendly destination, attracting a growing number of businesses involved in this space.
Additionally, the Dubai Financial Services Authority (DFSA) and the Abu Dhabi Global Market (ADGM) have implemented regulations to license and supervise digital asset businesses within their jurisdictions, including monitoring crypto exchanges.
In June, the UAE Central Bank introduced the Payment Token Services Regulation, recognizing digital money services as financial activities requiring Central Bank licensing and oversight. If the UAE-pegged stablecoin launches, it will likely pave the way for other stablecoins to seek licensing under this new regulatory framework.
Meanwhile, the stablecoin industry has become increasingly lucrative, with the total supply surpassing $160 billion for the first time in over two years, nearing all-time highs. Tether's USDT dominates the market, generating revenues of $93.75 million. Circle's USDC follows with $28.89 million.
The growing supply of stablecoins reflects their rising adoption and deeper integration within the crypto ecosystem, signaling increased trust and reliance on these assets for trading, payments, and financial services.