As a seasoned crypto investor with years of experience navigating the volatile and dynamic digital asset landscape, I find Tether’s latest move to launch a stablecoin pegged to the UAE dirham an intriguing development. The United Arab Emirates, with its forward-thinking regulatory framework and growing influence in global finance, presents an attractive market for such a venture.
Tether, the stablecoin creator, has revealed its intention to introduce a new stablecoin tied to the currency of the United Arab Emirates – the dirham.
On August 21st, Tether Inc., the leading stablecoin issuer, declared that they will be introducing a new stablecoin in partnership with Phoenix Group PLC, a prominent technology company based in the United Arab Emirates, as well as Green Acorn Investments Ltd.
The specific date for the launch remains undisclosed, but the new asset is guaranteed to be backed equally with liquid reserves based in the UAE and will be issued according to the Payment Token Services Regulation recently introduced by the UAE Central Bank in June. Tether plans to obtain licensing under this regulatory framework to maintain compliance, as stated in the press release.
As per the recent news, there’s been a significant increase in the usage of cryptocurrencies within Dubai following the creation of the Virtual Asset Regulatory Authority (VARA) in 2022. This autonomous regulatory body is responsible for issuing licenses, enforcing regulations, and managing the oversight of the digital currency industry, which they’ve dubbed VARA.
Tether anticipates that the upcoming stablecoin will serve as an affordable replacement, offering the advantages associated with the UAE Dirham (AED), particularly in the areas of global trading and remittances. Additionally, it aims to provide protection from currency volatility by acting as a hedge.
Paolo Ardoino, head of Tether, predicts that their stablecoin will serve as a crucial instrument for both companies and individuals seeking a “reliable and streamlined method” for transactions using UAE’s dirham (AED).
“As the United Arab Emirates continues to establish itself as a major player on the world’s economic stage, we are confident that our token, which is pegged to the UAE Dirham, will prove to be a useful and adaptable asset for our users.”
Paolo Ardoino
The new stablecoin is about to be added to the lineup of fiat-linked stablecoins that Tether has developed over time. Back in 2020, they debuted EURT, a stablecoin backed by the euro, and two years after that, they introduced CNHT, a stablecoin pegged to the Chinese yuan.
Nevertheless, USDT, Tether’s primary digital asset, holds the title of the world’s largest stablecoin, boasting a market cap of more than $117 billion. This equates to approximately 69% of the entire stablecoin market share.
Although Tether is currently a leading player in the market, it has faced criticism regarding potential misuse of USDT by entities under sanctions and for other questionable uses. In an effort to alleviate these concerns, Tether entered into a partnership with blockchain analytics firm Chainalysis, aiming to monitor transactions involving USDT on the secondary market.
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2024-08-21 15:10