Crypto giant Tether is launching a stablecoin pegged to the pound sterling

Smartphone with tether logo is placed on displayed US dollars in this May 12, 2022 illustration. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo

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LONDON, June 22 (Reuters) – Major crypto firm Tether said on Wednesday it will release a “stablecoin” pegged to the British pound next month, a move that comes amid London plans to regulate the fast-growing cryptocurrency kind of digital currency worked out.

Stablecoins are cryptocurrencies designed to hold a stable value against traditional currencies or commodities like gold. They try to avoid the volatility that makes Bitcoin and other digital tokens impractical for most trading firms.

Crypto markets were rocked last month when the value of terraUSD, a stablecoin that used a complex algorithm, collapsed, spotlighting the importance of stablecoins to the crypto trading world. Continue reading

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Based in the British Virgin Islands, dollar-pegged stablecoin Tether is the third largest by market cap with around $68 billion in circulation.

It is the predominant medium for moving funds between crypto and regular cash. Its tokens are backed by a mix of dollars, government debt, and short-term corporate debt.

As terraUSD’s demise triggered a sell-off in crypto markets, Tether broke through its 1:1 peg to the dollar, shaking investor confidence in a key wheel of the crypto economy.

The UK plans to legislate to bring some stablecoins under the scrutiny of regulators, part of a plan to harness the potential of crypto and blockchain technology to help consumers make payments more efficiently. Continue reading

It said in May it would adjust existing rules to cope with major stablecoin crashes. Continue reading

“We believe the UK is the next frontier for blockchain innovation and the broader implementation of cryptocurrencies for financial markets,” Paolo Ardoino, Tether’s chief technology officer, said in a statement, adding that the company is in contact with UK regulators will work together.

The UK Treasury did not immediately respond to a request for comment.

In addition to its dollar-backed coin, Tether offers tokens pegged to the euro, the offshore Chinese yuan, and the Mexican peso.

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Reporting by Elizabeth Howcroft and Tom Wilson; Editing by Hugh Lawson

Our standards: The Thomson Reuters Trust Principles.

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