On August 21, leading stablecoin issuer Tether announced the launch of a stablecoin pegged to the United Arab Emirates dirham (AED). This innovative move is part of a strategic partnership with two prominent UAE-based companies, Phoenix Group PLC and Green Acorn Investments Ltd.
Tether Aims to Streamline Cross-Border Transactions and Remittances in UAE
According to the press release, the new token will be “fully backed by liquid UAE-based reserves” and adhere to Tether’s “transparent and robust reserve standards,” providing users with a stable digital representation of the local currency.
The introduction of the Dirham-backed stablecoin represents Tether’s commitment to supporting the rapidly growing crypto landscape in the UAE as the stablecoin will be pegged to the country’s local currency (AED).
Tether’s CEO, Paolo Ardoino, emphasized the significance of this move, stating that the UAE is becoming a “significant global economic hub.”
He believes the Dirham-pegged stablecoin will be a “valuable and versatile addition” for Tether’s users, offering a cost-effective solution for accessing the benefits of the AED.
The partnership with Phoenix Group PLC, a prominent Abu Dhabi-based tech conglomerate, aims to equip businesses and individuals in the UAE with an “essential tool” for digital transactions.
Seyed Mohammad Alizadehfard, the co-founder and Group CEO of Phoenix Group, expressed enthusiasm about the collaboration, highlighting the firm’s dedication to providing innovative financial solutions.
Capitalizing on the UAE’s Crypto Boom
The launch of the Dirham-pegged stablecoin aligns with the UAE’s growing prominence as a hub for cryptocurrency and blockchain innovation.
Since 2022, the country has witnessed a surge in crypto investment, partly attributed to establishing the Virtual Asset Regulatory Authority (VARA) in Dubai.
This latest development by Tether comes amid the company’s recent activity on the TRON blockchain, where it has minted an additional $1billion USDT tokens.
Notably, the global stablecoin market is expected to experience significant growth, reaching a projected value of $2.8 trillion by 2028.
Meanwhile, cryptocurrency continues to gain traction in the UAE, an example of which was the recent ruling in favor of salary payments in crypto under employment contracts by the Dubai Court of First Instance. The case involved an employee who filed a lawsuit claiming the employer had not paid their wages, which included a monthly salary in fiat and 5,250 in EcoWatt tokens.
According to Irina Heaver, a partner at the UAE law firm NeosLegal, the court’s ruling in case number 1739 of 2024 demonstrates a “progressive approach” to integrating digital currencies into the country’s legal and economic framework.
Dubai court recognizes crypto as a valid salary payment
Heaver said that the case involved an employee who filed a lawsuit claiming that the employer had not paid their wages, wrongful termination compensation and other benefits.
The worker’s employment contract… pic.twitter.com/AuUUkn6NVJ
— ChainMentor – AI Web3 Learning (@ChainMentorApp) August 16, 2024
The latest ruling shows the court’s willingness to recognize the validity of crypto-based salary payments, further solidifying the UAE’s position as a crypto-friendly jurisdiction.
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