British pound-pegged Tether to ruffle some feathers in the UK?

Sahana Kiran
Source – Unsplash

Expansion all the way. Several platforms in the crypto-verse have been exploring new markets despite the onset of the bears. Stablecoin Tether followed suit as Tether Operations Limited is set to roll out a stablecoin pegged to the British Pound Sterling. With the ticker symbol GBP₮, the stablecoin will likely debut in early July.

In a recent blog post, the platform noted that GBP₮ would be pegged 1:1 to the British Pound Sterling. Tether intends to put the British Pound on the blockchain to provide a faster and inexpensive asset transfer option. Speaking about the same, the CTO of the network, Paolo Ardoino, said,

“We believe that the United Kingdom is the next frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets. 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.”

At present, Tether has about four different fiat-currency pegged tokens. This includes the US dollar-pegged asst USD₮, Chinese Yuan-pegged CNH₮ along with Euro-pegged EUR₮ as well as Mexican Peso-pegged stablecoin MXN₮.

Will GBP₮ survive amidst increased scrutiny around stablecoins?

The bears certainly took out “stable” from stablecoins this year. The dramatic downfall of Terra’s stablecoin UST caused nothing but havoc in the market. Initially, stablecoins weren’t under the purview of the regulators, considering their stability and peg to a fiat currency. However, the whole Terra fiasco changed the face of stablecoin regulation. Since UST was an algorithmic stablecoin, the chances of USDT enduring the same fate as UST was minimized. Yet, USDT was depegged last month.

Following the Terra crash, the UK government published a consultation paper that focused on minimizing the risk of holding stablecoins. However, in his latest statement CTO Ardoino affirmed that the firm would work with regulators. He added,

“Tether is ready and willing to work with UK regulators to make this goal a reality and looks forward to the continued adoption of Tether stablecoins.”

In addition to this, the UK inflation peaked.

The increased inflation in both US and the UK has taken a toll on the crypto market, and the surging inflation further prompted a massive crypto sell-off. This time, as mentioned earlier, stablecoins were also at risk.

It’s uncertain how regulators in the UK would welcome GBP₮. Yet, Tether, the world’s largest stablecoin, seemed bold in deciding to roll out a new stablecoin amidst increased tension in the market.