Tether launching British pound stablecoin as redemptions escalate

·2-min read
UKRAINE - 2021/09/16: In this photo illustration a Tether (often called by its symbol USDT) logo is seen on a smartphone and a pc screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
Tether is to launch a new stablecoin pegged to the British pound. Photo: by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

Tether is to launch a stablecoin pegged to the British pound. However, the largest stablecoin by market cap is being tested with billions of redemptions amid the cryptocurrency crash, and rival USDC has flipped tether in daily transactions on Ethereum.

Tether's (USDT-USD) new product will be pegged 1:1 to the British pound and will be called GBPT.

The stablecoin token linked to the pound will begin life as an ERC20 token on the Ethereum blockchain and is expected to be deployed in early July.

Read more: Crypto: Tether hole widens as it loses another billion in a day

Tether’s CTO Paolo Ardoino in a company statement said: “We believe that the United Kingdom is the next frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets.

Read more: Crypto live prices

"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.”

Tether's interest in providing a stablecoin based upon the pound follows the UK Treasury’s plans to turn the nation into a global crypto hub.

In April the UK Treasury recognised stablecoins as a “valid form of payment”.

In a UK Treasury statement, Chancellor of the Exchequer Rishi Sunak announced that by regulating crypto effectively investors will have "the confidence they need to think and invest long term".

Tether, USDT, has been steadily losing its market share to competitor stablecoin USDC after a slew of redemptions over the past weeks.

Data from Coingecko has revealed how Tether’s market cap lost 19% since the start of May, dropping from an all-time high of $83bn to $66.8bn.

Read more: Crypto: Stablecoin storm spreads after billions of tether is cashed out

Whereas USDC has gained 5% and hit an all-time high of $56bn.

Data from Nansen, a crypto analysis firm, reveals that daily transactions of USDC on the Ethereum blockchain has overtaken USDT.

This has been interpreted as a signal of future dominance of USDC and of investors losing confidence in USDT in the long term.

On Wednesday the cryptocurrency market dipped slightly after a flurry of green on Tuesday.

Bitcoin (BTC-USD) declined as much as 2.9% to $20,244, still holding above the key $20,000 level.

Ethereum (ETH-USD) fell by a maximum 3.3% to $1,084.80.

Speaking to Bloomberg about the current crypto crisis, Mark Newton, head of technical strategy at Fundstrat Global Advisors said: “Bitcoin has made ‘a bottom’ but probably not ‘the bottom’.

“Upside targets should materialise near $23,300 with a max near $24,800 before prices pull back to likely challenge lows into the final week of June.”

Watch: Can you live exclusively off bitcoin?

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