Ex-SoftBank executive sets up UAE stablecoin, teams up with Hong Kong firm to target high-net-worth users
- Akshay Naheta, who pitched SoftBank on selling chip firm Arm to Nvidia, set up his stablecoin firm DTR in Abu Dhabi’s financial free zone
- Hong Kong-based DRAM Trust is a partner on the project, which could appeal to people from high-inflation countries and provide an alternative to SWIFT
The 42-year-old financier has set up DTR within the emirate’s international financial free zone and will partner on the project with Hong Kong-based DRAM Trust, which has ties to several high-net-worth individuals. They’re looking to capitalise on a stablecoin market that analysts at Bernstein estimate will grow more than 20-fold to US$2.8 trillion in five years.
Unlike most coins in the market that are tied to the US dollar, DRAM coins will be backed by the United Arab Emirates dirham. The currency’s peg to the greenback offers greater stability for individuals in high-inflation countries from Turkey to Egypt and Pakistan, while also providing an alternative to the SWIFT system.
“Our main focus is the unbanked and underbanked in these nations,” Naheta said in an interview from Dubai. “If you want to diversify your risk and be in a currency that’s complimentary to the dollar, there’s a big percentage of money that can move into this.”
A former trader at Deutsche Bank AG, Naheta was central to some of SoftBank’s biggest deals during his tenure. He pitched founder Masayoshi Son on the sale of chip designer Arm to semiconductor designer Nvidia Corp. He also led a US$4 billion investment in Nvidia in 2017, earning US$3 billion in profit.
Since departing SoftBank last year, Naheta has been working on a range of fintech projects, using the UAE as his home base.
Stablecoins – crypto tokens that are pegged to an asset like the dollar – have been around for almost a decade, but they’re mostly used by traders to move digital assets between exchanges and have made limited inroads into consumer payments. There’s roughly US$124 billion worth of stablecoins in circulation, according to CoinGecko, the biggest by far being Tether Holdings’ USDT.
To supporters, they’re a superior means of achieving cheap, instant money transfers and payments. Yet they’ve faced resistance from central banks that are busy developing their own digital currencies.
DRAM coins will be available on decentralised exchanges including Uniswap, Sushiswap and Pancakeswap, and the team plans to work with centralised exchanges in the near future, according to Naheta.
The former SoftBank executive expects it to have particular appeal in the UAE, which boasts a big expatriate population and sits near a number of high-inflation nations in Africa, the Middle East and Asia.
While Emirati banknotes play a small role in the global economy today, they’ve recently emerged as a more popular petrocurrency.
“We’re moving into a whole new and rewired financial system where the dirham will be a big player,” Naheta said. “I’m extremely bullish on the UAE. It’s the new Switzerland – geopolitically neutral, a great transportation hub and a top tourism destination.”