Decrypt’s Art, Fashion, and Entertainment Hub.
Tether, the world’s largest stablecoin issuer, said it will introduce a token pegged to the British pound next month.
The stablecoin (GBPT), according to a company statement on Wednesday, initially will be supported by the Ethereum blockchain.
GBPT is set to become the fifth fiat currency-pegged stablecoin launched by Tether, joining the U.S. dollar-pegged USDT, euro-pegged EURT, Chinese Yuan-pegged CHNT, and the recently launched Mexican peso-pegged MXNT.
A stablecoin is a cryptocurrency designed to be redeemable for a fixed amount of a less volatile monetary good, such as a fiat currency. Such coins are designed to provide efficiencies and utilities to blockchain payments currently seen with traditional currencies.
Regulators worldwide have been paying close attention to the benefits and risks associated with stablecoins, from their use in cross-border remittances to illicit transactions. However, the United Kingdom announced intentions to become a “crypto asset technology hub” in April, inspiring Tether to accommodate its services for the region’s national currency.
“We believe that the United Kingdom is the next frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets,” Tether CTO Paolo Ardoino said in the statement. “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.”
Stablecoins have taken up a larger share of the total crypto market cap in recent months, as the vast majority of free-floating cryptos have receded in price. As of now, three of the top six are dollar-pegged stablecoins.
Though Tether’s USDT remains king, Circle’s USDC is fast approaching. The former has seen billions of dollars in token redemptions since May, while USDC’s market cap has increased by 5%.
The collapse of formerly the third-largest stablecoin, Terra’s UST, sparked the redemption wave early last month as investors started to lose faith in stablecoin holdings. However, Ardoino believes the event served as proof that Tether can handle such redemptions “without the blink of an eye,” while maintaining its peg.