As a seasoned analyst with a background in both traditional finance and blockchain technology, I find Tether’s move to develop a UAE Dirham-pegged stablecoin intriguing. With my years of experience navigating the complexities of cross-border transactions and digital assets, I see this initiative as a strategic step towards bridging the gap between traditional finance and cryptocurrencies.
Tether, the company behind the USDT stablecoin, has teamed up with Phoenix Group and Green Acorn Investments for a project that aims to create a new digital currency tied to the UAE Dirham (AED). This venture is poised to take the front-runner position in obtaining necessary licensing within the nation’s emerging regulatory system and streamline transactions.
Tether Reveals UAE Dirham-Pegged Stablecoin
Tether has unveiled their strategy for creating and launching a digital version of the United Arab Emirates Dirham. This new stablecoin will be fully supported by UAE liquid assets, ensuring that each token’s value aligns with the AED (United Arab Emirates Dirham). This backing provides stability and trust in its worth.
The new Dirham-linked digital currency will be added to our product lineup, offering clients a hassle-free and economical way to utilize the advantages of the UAE Dirham, all while taking advantage of the transparency and speed offered by blockchain technology.
Tether, a well-known stablecoin provider, will work together with the UAE’s massive tech organization, Phoenix Group, and receive aid from Green Acorn Investments for the advancement of this digital asset. This innovative asset is geared towards simplifying international trade and remittances within the region.
Moreover, it aims to be instrumental within the UAE’s monetary infrastructure, offering lower transaction costs and shielding users from exchange rate risks. In a recent statement, Tether’s Chief Executive Officer, Paolo Ardoino, displayed his enthusiasm for the upcoming stablecoin initiative.
We’re thrilled to unveil our new project: creating a stablecoin pegged to the UAE Dirham as part of Tether’s expanding stablecoin portfolio. The United Arab Emirates is rapidly growing into a major global economic center, and we anticipate that our Dirham-pegged token will be a valuable and versatile asset for our users. Tether’s new Dirham-pegged stablecoin aims to become an indispensable tool for businesses and individuals seeking a secure and efficient way to transact in the UAE Dirham, whether for cross-border payments, trading, or diversifying digital assets.
UAE’s New Payment Token Services Regulation
According to Seyed Mohammad Alizadehfard, co-founder and CEO of Phoenix Group, he is optimistic that a stablecoin tied to the UAE Dirham has the ability to revolutionize the digital economy not just within the region, but also globally.
The CEO emphasized Abu Dhabi’s “forward-thinking approach towards blockchain, digital assets, and innovation,” positioning it as an ideal starting point for the product. According to the announcement, the companies plan to be pioneers in obtaining licensing under the fresh UAE Central Bank (CBUAE) Payment Token Services Regulation (PTRS).
The CBUAE recently unveiled its new regulatory framework for stablecoin-related services in the UAE. Under the new PTRS guidelines, businesses and vendors in the Emirates can’t accept crypto payments for goods and services unless they are a Dirham-backed payment token.
Furthermore, Issuers of Foreign Payment Tokens are required to register with the Central Bank and maintain 100% of their reserves in cash within an escrow account. The CBUAE has provided a one-year transition period, ending in June 2025, during which the PTRS will not be implemented, giving businesses time to comply with the new regulations.
It’s important to mention that these new rules won’t affect financial districts like the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM). On the other hand, they do apply to entities that have been licensed by the Virtual Asset Regulatory Authority (VARA), which is already in place.
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2024-08-22 08:12