Tether appears set to roll out a new stablecoin, this time pegged to the British pound. The new stablecoin will be Tether’s fifth.
Early next month, Tether will launch a stablecoin pegged to the British pound. Dubbed GBPT, the stablecoin is part of a push by Tether into new stablecoins, and will initially be available on the Ethereum blockchain.
The incoming pound stablecoin is Tether’s fifth fiat-pegged stablecoin. In addition to the widely popular USDT, Tether’s other stablecoin offerings include the euro-pegged (EURT) and the offshore Chinese yuan-pegged (CNHT) stablecoins. Lastly, the stablecoin issuer also recently launched the Mexican peso-pegged MXNT.
How New Tether Pound Stablecoin Fits Into Larger British Financial Tapestry
Speaking on the GBPT stablecoin initiative, Tether chief technical officer Paolo Ardoino said in the statement:
“We believe that the United Kingdom is the next frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets.”
In addition, Ardoino also expressed Tether’s desire to help shape the British blockchain clime in a meaningful and impactful way. According to him:
“We hope to help lead this innovation by providing cryptocurrency users worldwide with access to a GBP-denominated stablecoin issued by the largest stablecoin issuer.”
Furthermore, the Tether CTO suggested that Tether is eager to collaborate closely with UK so that the region is the “next frontier for blockchain innovation”. Lastly, Ardoino added that the issuer is looking forward to the continued adoption of more stablecoins.
The new pound stablecoin comes amid a continued push for CBDCs by central banks in the UK and Europe. Central bank digital currencies are state-issued versions of a stablecoin and could also be loosely termed centralized digital currencies. Currently, the Bank of England is still deliberating with market participants on whether to launch a digital pound sterling. However, even if approved presently, the UK central bank says that the token would not arrive earlier than the second half of this decade.
Presently, the UK is continuing to stoke its ambition of becoming a global crypto hub, hence the Tether stablecoin initiative. Although it is yet to accept crypto as legal tender, the country has announced plans for structured crypto regulation. According to reports, this would take place under its existing e-money legislation.
Stablecoins are widely adopted and used by traders and investors as a store of wealth for safeguarding against market volatility. However, the fiat-pegged digital currencies have also come under recent scrutiny as their stability is now being called into question.
Last month, algorithmic stablecoin TerraUSD (UST) suffered a catastrophic collapse. This translated to a loss of investor money in large sums and the subsequent discontinuation of the stablecoin. Part of the reason widely accepted as triggering the UST implosion was its questionable operational mode. Unlike Tether, which keeps near-cash investments as a backup, UST used a different method. The stablecoin was without cash reserves and only maintained its dollar parity via a series of complex and programmable codes. Although UST issuer Terra had an extensive Bitcoin (BTC) portfolio, it could not compare to the liquidity potential of other stablecoin issuers’ backup investments. Also, BTC itself is highly volatile and also subject to the whims of traditional market forces.
Since the UST collapse, there have been calls for greater transparency in the quality and liquidity of stablecoin investments.