TL;DR

Tether is aiming to obtain a license for its stablecoin under the U.A.E. central bank’s Payment Token Services Regulation.  

Stablecoins like USDT are digital assets typically tied to fiat currencies, offering users a hedge against the notorious volatility of cryptocurrencies such as Bitcoin (BTC). 

The issuer of the world’s largest stablecoin provider Tether announced its plans to launch a stablecoin pegged to the UAE dirham. This move is in collaboration with Phoenix Group (PHX), a crypto conglomerate listed in Abu Dhabi. 

Tether’s USDT currently holds a commanding position in the stablecoin market, with a market cap exceeding $117 billion and accounting for nearly 70% of the entire stablecoin market, according to data from CoinGecko.

Stablecoin market dominance

While USDT, pegged to the U.S. dollar, dominates the market, other stablecoins linked to different fiat currencies remain relatively small. For instance, Tether’s euro-pegged stablecoin, EURT, has a market cap of just $30 million, highlighting the disparity between dollar-linked stablecoins and those tied to other currencies.

Background on Crypto Regulation in UAE

Tether’s move to launch a dirham-pegged stablecoin comes at a time when the UAE is solidifying its position as a global crypto hub. The UAE central bank’s recent introduction of the Payment Token Services Regulation in June provides a licensing framework for stablecoins, which could significantly boost the adoption and use of dirham-pegged tokens. 

Wrapping Up

The combination of a supportive regulatory environment and the reputations of Dubai and Abu Dhabi as leading crypto hubs makes the UAE an ideal market for this new digital asset.

Source: CoinDesk

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