The largest stablecoins are all pegged to the U.S. dollar, while those linked to other currencies are comparatively small.
The central bank’s licensing framework for dirham stablecoins could give them a boost, especially given the reputations of Dubai and Abu Dhabi as crypto hubs.
Tether, the developer of the world’s largest stablecoin, said it plans to introduce a token pegged to the United Arab Emirates’ dirham in collaboration with Abu Dhabi-listed crypto conglomerate Phoenix Group (PHX).
Stablecoins are a form of digital asset usually pegged to a fiat currency that give users a hedge against the volatility that can afflict cryptocurrencies like bitcoin (BTC). The major stablecoins are all pegged to the U.S. dollar, of which Tether’s USDT is comfortably the largest with a market cap of over $117 billion. USDT accounts for a share of the stablecoin market of nearly 70%, according to CoinGecko data.
Tokens pegged to other fiat currencies are minuscule by comparison. Tether’s euro equivalent (EURT), for example, has a market cap of just $30 million.
Tether plans to seek licensing for the dirham stablecoin under the U.A.E. central bank’s Payment Token Services Regulation announced in June, according to an emailed announcement on Wednesday. That might give it a boost, especially given the reputations of Dubai and Abu Dhabi as crypto hubs.