Tether Plans Stablecoin Pegged to the Pound
Tether, the controversial “stablecoin” that supports over $60 billion of the cryptocurrency economy, is launching a British version in order to capitalize on the desire of the UK government to make Britain a global cryptocurrency hub. This will allow Tether to capitalize on the desire of the UK government to make Britain a global cryptocurrency hub. The digital asset will be developed on the Ethereum blockchain, similar to its US dollar equivalent; however, its value will be fixed at £1, rather than the $67 billion (£55 billion) that is regularly traded on cryptocurrency markets.
Chief Technology Officer of Tether, Paolo Ardoino, said that “the company believes the United Kingdom to be the next frontier for blockchain innovation and the broader application of cryptocurrencies for financial markets. We intend to play a leading role in this innovation by giving cryptocurrency users all around the globe access to a stablecoin denominated in GBP that was issued by the stablecoin issuer with the most market share.”
“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,” added Ardoino, who is also CTO of the cryptocurrency exchange Bitfinex. This dual role is shared by the chief executives, chief operating officers, chief financial officers, and general counsels of both companies. “Tether looks forward to the continued adoption of Tether stablecoins,” Ardoino concluded.
The introduction of the GBPT token takes place at a period that is not favorable for cryptocurrencies. As a result, the industry has shrunk from about $3 trillion worth of trade tokens to less than $1 trillion, and the value of the most prominent cryptocurrency, bitcoin, has decreased from a peak of almost $70,000 to less than $20,000. As investors scramble to cash out into safer assets, the value of Tether’s main token, the USD tether, has decreased by more than $8 billion in little over a week, and the entire value of Tether that is circulating has decreased by about $20 billion from its all-time high.
Despite the declines, Tether asserts that its company has never been more solid, and the rapidity with which the billions were removed is cited as proof of the sturdy foundations upon which it is built. The company made the following boast in a statement that was released at the beginning of June: “Tether recently faced redemption requests for $10 billion of USD tokens within a single week and was able to fulfill all requests in full with ease; $10 billion of redemptions represented more than 12 percent of outstanding USD tokens.” There isn’t a single financial institution on the planet that could handle the withdrawal of 12% of its total outstanding obligations in a single week.
The organization behind Tether asserts that every unit of the cryptocurrency is supported one for one by assets kept in reserve, which is how it manages to keep its value stable. This is a different claim from the one that it made when it first began its company, which was that each and every Tether was backed by US dollars that were kept in reserve. After an inquiry by the office of the New York attorney general, it was determined that the assertion was a “false,” and as a result, Tether was fined $18 million and prohibited from operating in the state of New York.
The United Kingdom’s government has said that it would continue to provide assistance for the cryptocurrency industry, and it has identified stablecoins as a sector that requires governmental encouragement.
A spokeswoman for the Treasury said that “We are strongly committed to keeping the UK’s financial services industry at the forefront of the forefront of cryptoasset technology and innovation.” [Citation needed] This involves minimizing possible threats to financial stability while simultaneously enabling the circumstances under which stablecoins, when used as a method of payment, may function and thrive in a risk-free environment. The financial services and markets law that is about to be passed in the UK will lay down the groundwork for the regulation of stablecoins.