Tether, the issuer of USDT, has announced a collaboration with Phoenix Group and Green Acorn Investments to create a new stablecoin pegged to the United Arab Emirates Dirham (AED). This initiative aims to secure licensing under the UAE’s new regulatory framework and facilitate smoother transactions.
Tether Introduces UAE Dirham-Pegged Stablecoin
Tether plans to develop and launch a digital version of the UAE Dirham, fully backed by liquid reserves based in the UAE. This will ensure that each Dirham-pegged token maintains a stable value equivalent to the AED, offering users confidence in its stability.
The new stablecoin will be added to Tether’s existing products, providing users with a cost-effective and transparent way to access the benefits of the AED through blockchain technology. The partnership with Phoenix Group and support from Green Acorn Investments will enable the stablecoin to enhance international trade and remittances in the region.
Additionally, the Dirham-pegged stablecoin aims to reduce transaction fees and protect users from currency fluctuations, making it a crucial tool in the UAE’s financial ecosystem. Tether’s CEO, Paolo Ardoino, expressed his enthusiasm for the project, highlighting the UAE’s growing importance as a global economic hub.
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UAE’s New Payment Token Services Regulation
Seyed Mohammad Alizadehfard, co-founder and Group CEO of Phoenix Group, emphasized the transformative potential of the Dirham-pegged stablecoin in the region’s digital economy. He noted that Abu Dhabi’s progressive approach to blockchain and digital assets makes it an ideal location for the product’s launch. The companies involved will work towards obtaining licensing under the UAE Central Bank’s new Payment Token Services Regulation (PTRS).
The CBUAE recently introduced this regulatory framework, requiring businesses in the UAE to use Dirham-backed payment tokens for crypto payments. Foreign Payment Token Issuers must register with the Central Bank and maintain 100% asset reserves in cash. The CBUAE has provided a one-year transitional period until June 2025, allowing businesses to comply with the new regulations.
The PTRS will not apply in financial zones like the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), but it will be relevant to entities licensed by the Virtual Asset Regulatory Authority (VARA).
Cre: bitcoinist.
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