The Abu Dhabi Securities Exchange-listed Phoenix Group and digital asset firm Tether have announced a plan to launch a stablecoin pegged to the UAE dirham. The aim of this initiative is to capitalize on the stability of the UAE currency and tap into the global stablecoins market, which is currently valued at $150 billion and projected to reach $2.8 trillion by 2028. This dirham-pegged stablecoin will be built on a blockchain platform to ensure security, transparency, and efficiency for users.
Stablecoins are a type of cryptocurrency that is tied to another asset class, such as gold or stable currencies, to maintain a steady and stable value. The popularity of stablecoins lies in fiat-backed stablecoins, which are tied to currencies like the US dollar, and gold-backed cryptocurrencies. The UAE’s large sovereign wealth funds and the pegging of the dirham to the US dollar make it one of the most reliable currencies globally. This dirham-pegged stablecoin is expected to provide users across the region and beyond with a transformative digital economy experience.
Seyed Mohammad Alizadehfard, co-founder and group CEO of Phoenix Group, expressed confidence in the potential of the dirham-pegged stablecoin to revolutionize the digital economy for users. He anticipates that the dirham-pegged coin will be available in people’s wallets by January 2025. The collaboration with Tether signifies a commitment to innovation and excellence, reflecting on providing financial solutions that cater to customers’ needs. Abu Dhabi’s progressive stance towards blockchain, digital assets, and innovation makes it an ideal launchpad for this initiative.
Munaf Ali, co-founder and managing director of Phoenix Group, highlighted that they are closely working with regulators and stakeholders to expedite the launch process. The group aims to launch the dirham-pegged stablecoin in January 2025, with plans for it to be listed on all exchanges and be equivalent to one dirham. Paolo Ardoino, CEO of Tether, emphasized the significance of the UAE as a global economic hub and the potential of the dirham-pegged stablecoin as a valuable addition for users. This stablecoin is expected to become an essential tool for businesses and individuals seeking secure and efficient means of transacting in the UAE dirham.
The recent approval by a Dubai court for the payment of salaries in cryptocurrencies has further underscored the importance of launching the dirham-pegged stablecoin. As the UAE continues to emerge as a significant global economic hub, the launch of this stablecoin is timely and strategic in meeting the evolving financial needs of businesses and individuals in the region. With the aim of providing a secure and versatile digital asset for transactions, the dirham-pegged stablecoin is poised to become a valuable tool for cross-border payments, trading, and asset diversification. This initiative not only showcases a commitment to financial innovation but also reflects the growing adoption and integration of blockchain and digital assets in the region.
