Tether plans to launch a stablecoin tied to the British pound

Tether is releasing a crypto token tied to the value of the British pound as part of a push into new stablecoins.

The GBPT token will be available to trade on the Ethereum blockchain from early July, according to a statement on Wednesday. The crypto platform also offers tokens pegged to the US dollar, euro, Chinese yuan and Mexican peso, having launched the latter last month.

Stablecoins are one of the most used tokens in crypto, and have been adopted by traders and investors as a store of wealth to safeguard portfolios against market volatility. The number of dollar-pegged Tethers, or USDT, in circulation has dropped significantly in recent months as price instability pushed traders to sell their tokens.

Tether has been harder hit by the crypto rout than rivals, such as Circle’s USDC, and its dollar token briefly lost its peg last month. Total USDT circulation has dropped to $67 billion, according to data from CoinGecko, compared with a peak of more than $83 billion in early May.

The new pound token comes as central banks in Europe and the UK push ahead with CBDCs, a state-issued version of a stablecoin. The Bank of England remains in discussions with market participants about whether to launch a digital sterling. The BOE has said the token wouldn’t arrive until the second half of this decade, if approved.

The UK’s ambition of becoming a crypto hub makes it an attractive destination, said Paolo Ardoino, chief technology officer at Tether. The UK has announced plans to regulate stablecoins under existing e-money legislation, though it’s not the same as accepting them as legal tender.

“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,” Ardoino said.

© 2022 Bloomberg