Tether (CRYPTO: USDT) is launching the pound-pegged stablecoin GBPT (CRYPTO: GBPT), following on the heels of its peso-pegged stablecoin.
What Happened: The stablecoin is set to join the markets in July on the Ethereum (CRYPTO: ETH) blockchain.
Tether endeavors to maintain a 1-to-1 ratio to the GBP for its stablecoin. This announcement, which occurred on June 22, also revealed that the GBPT is set to be a collateralized asset-backed stablecoin. In other words, each token of the stablecoin will be collateralized with cash equivalent reserves.
Tether’s latest launch follows the U.K. government and Treasury’s announcement in April deeming stablecoins and other elements of the cryptocurrency sector to be integrated into the nation’s regulatory framework.
GBPT is set to be Tether’s fifth fiat-pegged stablecoin launched into the market, following USDT (CRYPTO: USDT), Chinese Yuan-pegged Tether (CRYPTO: CNHT), Euro-pegged Tether (CRYPTO: EURT), and Mexican Peso Tether (CRYPTO: MXNT).
Why It’s Important: Following the recent crash of Terra (CRYPTO: LUNA) due to the de-peg of its algorithmic stablecoin UST (CRYPTO: UST), there has been extreme uncertainty surrounding stablecoins.
UST’s de-peg brought the importance of a stable coin’s fundamentals to the public eye. Consequently, algorithmic stablecoins have faced extreme criticism for their intrinsic risks, which may lead to a de-peg. Thus, Tether’s decision to make GBPT a collateralized, cash-backed stablecoin protects retail investor confidence to a major extent.
As stated by CTO of Tether Paolo Ardoino, “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.”
