UAE firms plan dirham-pegged crypto currency launch

On Wednesday, Phoenix Group, listed on the Abu Dhabi Securities Exchange, and digital asset firm Tether announced their plan to introduce a new stablecoin pegged to the UAE dirham. This collaboration aims to enhance financial stability and provide a secure digital currency option for users. The launch of this dirham-pegged stablecoin represents a significant development in the region’s digital asset landscape.

The launch of the dirham-pegged stablecoin aims to leverage the UAE currency's stability and tap into the global stablecoins market, currently valued at $150 billion. With projections indicating the market will grow to $2.8 trillion by 2028, this new coin is positioned to capitalize on significant growth opportunities. The initiative reflects the UAE's strategic move to expand its presence in the evolving digital finance sector.

The dirham-pegged stablecoin will utilize a blockchain platform to ensure security, transparency, and efficiency in transactions, enhancing trust and performance in digital financial operations.

Stablecoin is a form of digital currency that is linked to an asset like gold or stable currencies in order to maintain a constant and secure value. Fiat-backed stablecoins, such as those tied to the US dollar and gold-backed cryptocurrencies, are the most widely used stablecoins. The UAE's substantial sovereign wealth funds and linking of the dirham to the US dollar position it as one of the most trusted currencies worldwide.

Seyed Mohammad Alizadehfard, one of the co-founders and the group CEO of Phoenix Group, expressed his belief that the dirham-pegged stablecoin has the potential to revolutionize the digital economy for users in the region and beyond.
Alizadehfard predicted that the dirham-pegged coin would be in circulation by January 2025

This partnership with Tether highlights our focus on innovation and excellence as well as our dedication to offering financial solutions that fulfill our customers' requirements. He stated that Abu Dhabi's forward-thinking approach to blockchain, digital assets, and innovation provides an ideal platform for launching new initiatives.

We think that our dirham-pegged token will be a beneficial and flexible addition for our users, as the UAE is becoming an important global economic center. According to Tether CEO Paolo Ardoino, the stablecoin pegged to the dirham will be crucial for businesses and individuals in need of a safe and effective way to transact in the UAE dirham, whether it be for cross-border payments, trading, or diversifying digital assets.

The introduction of the dirham-pegged cryptocurrency gained additional significance when a Dubai court gave the go-ahead to use cryptos for paying salaries.