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UAE: Firms announce plan to launch dirham-pegged crypto coin

The launch is even more important after a Dubai court recently approved the payment of salaries in cryptos

Published: Wed 21 Aug 2024, 2:43 PM

Updated: Wed 21 Aug 2024, 8:43 PM

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Abu Dhabi Securities Exchange-listed Phoenix Group and digital asset firm Tether on Wednesday announced a plan to launch a stablecoin pegged to the UAE dirham.

The launch of the coin is aimed at capitalising on the UAE currency’s stability and tapping the global stablecoins market valued at $150 billion and is set to reach $2.8 trillion by 2028.

The dirham-pegged stablecoin will be built on a blockchain platform for security, transparency, and efficiency.

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Stablecoin, a type of cryptocurrency, is tied to another asset class such as gold and stable currencies to keep a stable and steady value of the coin. The popular stablecoins are fiat-backed stablecoins, which are tied to currencies such as the US dollar and gold-backed cryptocurrencies. The UAE’s large sovereign wealth funds and pegging of the dirham to the greenback make it one of the most reliable currencies globally.

Seyed Mohammad Alizadehfard, co-founder and group CEO of Phoenix Group, said he is confident that dirham-pegged stablecoin can transform the digital economy for users across the region and beyond.

Alizadehfard said dirham-pedgged coin is expected to be in people's wallet by January 2025.

"This collaboration with Tether not only underscores our commitment to innovation and excellence but also reflects our dedication to providing financial solutions that meet the needs of our customers. Abu Dhabi’s progressive stance towards blockchain, digital assets and innovation makes it the perfect launchpad,” he said.

Munaf Ali, co-founder and managing director, Phoenix Group, said they are working very closely with the regulator and all stakeholders to get it as soon as possible. He said the group is set to launch in January 2025.

“After the approval, it will be listed on all exchanges. It will be at par with dirham – one stablecoin equal to one dirham,” he said.

“The UAE is becoming a significant global economic hub, and we believe our users will find our dirham-pegged token to be a valuable and versatile addition. The dirham-pegged stablecoin is set to become an essential tool for businesses and individuals looking for a secure and efficient means of transacting in the UAE dirham, whether for cross-border payments, trading, or simply diversifying one's digital assets,” said Paolo Ardoino, CEO of Tether.

The launch of the dirham-pegged cryptocurrency became even more important after a Dubai court recently approved the payment of salaries in cryptos.

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