Tether to launch UK stablecoin
Tether, the enormously controversial stablecoin that sat at the heart of recent market volatility, is expanding. With the UK government keen to make Britain a cryptocurrency hub, it is backing a British version of the US-pegged stablecoin.
That US stablecoin currently accounts for around US$67 billion in active trades on cryptocurrency markets. The UK version will set its value at £1, and will be a digital asset built on the Ethereum blockchain.
In a feature on The Guardian, Paolo Ardonio, Tether’s CTO, said that the company was willing to work with UK regulators to make this project a success, and hinted that the company would explore further expansion options for the currency.
Despite the recent volatility in the market, Tether remains defiant. In June the company released a statement that read “Tether recently faced redemption requests for $10bn of USD₮ redemptions within a single week and was able to fulfil all requests in full with ease; $10bn of redemptions represented more than 12 per cent of outstanding USD₮ tokens. No bank in the world could process the withdrawal of 12 per cent of its outstanding liabilities within a week.”
However, it’s difficult not to read this as also something of an own goal. While it might highlight Tether’s ability to liquidate its user’s assets, it also highlights a massive drop in confidence in their ongoing viability as an asset to hold. Tether has lost around US$20 billion in total asset value since its peak.
Tether has also been sanctioned and barred from trading in New York on account of what was seen to be misleading claims.
Despite this, as The Guardian reports, the UK Treasury seems to have full confidence in the asset and company behind it. “We are delivering on this ambition – by consulting on a future regulatory regime for crypto-assets, legislating to bring stablecoins into payments regulation, and exploring ways of enhancing the competitiveness of the UK tax system to encourage further development of the crypto-asset market in the UK,” a Treasury spokesperson told the outlet.
Tether and crypto investors will no doubt see this as a positive sign in a market that is desperately in need of confidence. For one of the world’s most advanced economies to support crypto in this way will go a long way to convince people of the long term viability of digital assets.