Tether has announced plans to launch a new stablecoin pegged to the United Arab Emirates dirham (AED), in collaboration with Phoenix Group PLC and Green Acorn Investments Ltd.

This new stablecoin aims to facilitate quick and cost-effective transactions and remittances, capitalizing on the growing global interest in the UAE dirham.

Designed to provide users with stability, transparency, and cost-effective transactions in AED, the stablecoin will simplify access to the currency for institutions, businesses, and individuals.

Tether emphasizes that every dirham-pegged token will be fully backed by liquid UAE-based reserves, ensuring stability and confidence in its value.

This initiative is expected to boost liquidity in the crypto market and attract regional investors and businesses, enhancing tools for managing digital assets.

The UAE's central bank has already approved regulations for cryptocurrencies pegged to real assets, facilitating stablecoin arrangements backed by the UAE dirham.

Tether CEO Paolo Ardoino indicated that the next step involves obtaining licensing from the Central Bank of the UAE, a process expected to take a few months.

Seyed Mohammad Alizadehfard, co-founder and CEO of Phoenix Group, expressed enthusiasm about the potential of the new stablecoin to transform the digital economy in the region.

The announcement was made during an event in Dubai, although no specific launch date was provided.

Ardoino noted that the UAE is emerging as a significant global economic hub, making the stablecoin a valuable tool for transactions in the region.

The Central Bank of the UAE's new regulations require businesses to use dirham-backed tokens for crypto payments, ensuring a clearer regulatory framework.

The stablecoin industry is growing, with total supply surpassing $160 billion, indicating increasing adoption and trust in these assets.