The launch of Dirham-backed stablecoin shows that the digital asset market in the region is entering a more mature phase and is ready for the next phase of growth on the back of evolved regulatory frameworks.
Manhar Garegret, Country Head, India and Global Partnerships at Liminal, a wallet infrastructure and custody solutions platform, said, stablecoins have been one of the most pivotal use cases for digital assets. Traditionally, the stablecoin landscape has been dominated by US dollar-backed stablecoins such as USDT, USDC, and the recently introduced PYUSD. To gauge their popularity, one only needs to look at the numbers, i.e., the total market cap of stablecoins hovers around $124.117 billion (according to DeFi Llama), with USDT leading the way with a commanding 67.13% market share. Given its association with the world’s most influential currency, the US dollar, as crypto regulations keep developing across more regions, one will see a corresponding growth in the popular use cases as well.
The primary utility of stablecoins lies in their ability to facilitate cross-border payments at an exceptionally low cost. Globally, corporations shuffle approximately $23.5 trillion (as per JP Morgan’s report) across borders each year. The associated transaction costs for these massive sums tally up to a staggering $120 billion annually. This process is also plagued by issues like trapped liquidity, delayed settlements, and the need for foreign currency conversions. In this context, stablecoins offer a streamlined solution, enabling seamless transactions with unparalleled security and traceability on distributed ledger technology. These transactions can easily be facilitated through regulated and compliant custody solution providers.
The UAE market has already surprised us with their commitment to become leaders in the digital asset space, and it is not surprising to see such highly innovative and simple-to-use Web3 products emerging from the nation. The launch of Dirham-backed stablecoin shows that the digital asset market in the region is entering a more mature phase and is ready for the next phase of growth on the back of evolved regulatory frameworks.
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