Tether announced plans to introduce a new stablecoin tied to the United Arab Emirates (UAE) dirham, targeting the rising demand for Gulf currencies and offering an alternative to the U.S. dollar. Stablecoins, which are digital tokens pegged to traditional currencies like the U.S. dollar or euro, have seen significant growth as a payment method and as a trading tool for cryptocurrencies like bitcoin. Tether's USDT, the world's largest stablecoin, dominates the market with approximately $117 billion in circulation, accounting for the majority of the $169 billion stablecoin market.

According to Tether CEO Paolo Ardoino, the dirham-pegged stablecoin will provide an option beyond the U.S. dollar, as global trade patterns shift. The UAE, aiming to become a global hub for the crypto industry, has been proactive in enabling cryptocurrency payments in areas like real estate and education, while also establishing virtual asset regulations in Abu Dhabi and Dubai. The new stablecoin will be fully backed by UAE-based reserves and is being launched in partnership with Phoenix Group and supported by Green Acorn Investment, though a launch date has not yet been announced.