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An AED-pegged stablecoin is in the works: ADX-listed crypto miner Phoenix Group and cryptocurrency giant Tether are planning to launch a new AED-pegged stablecoin, with support from Green Acorn Investment, according to an ADX disclosure (pdf). The stablecoin will be “fully backed” by liquid UAE-based reserves, and accessible globally, according to a separate statement from Tether. The collaboration is subject to regulatory review and approval.
Uh, Enterprise, what is a stablecoin? Stablecoins are digital tokens that maintain a stable value by being tied to fiat currencies like the USD. They can be used for both payments and crypto trading.
The move comes in a bid to offer an alternative to USD-backed stablecoins, Reuters cites Tether CEO Paolo Ardoino as saying during an event in Dubai. “We see a lot of interest in holding AED outside of the UAE,” Ardoino said, adding that he suspects the AED will become a preferred currency as global trade shifts, driven by the stability and safety of the UAE and its balance sheet.
Timeline: While the crypto players did not disclose a specific launch date for the stablecoin, Reuters quotes Ardoino as saying licensing from the Central Bank could take a few months.
REMEMBER- The Abu Dhabi Global Market just published draft regulations to allow the issuance of stablecoins, after the Dubai Financial Services Authority recently eased stablecoin regulations. The Central Bank of the UAE’s board also greenlit the introduction of a licensing and regulatory system for stable cryptocurrencies.
