Similar to Circle and their new Euro coin, Tether has announced that it will release a stablecoin that is pegged to the pound sterling in early July. Finally, the Brits and all UK lovers get what they want – a UK based stablecoin from a well-known source.
Initial blockchain support for the GBPT token will include Ethereum, but more blockchains are likely to be added later. This news comes shortly after Tether announced the release of the MXNT, a coin that is tied to the Mexican peso. The creation of the GBPT is long overdue, given that the GBP is one of the most important fiat currencies in the world. Pound sterling is in fact the oldest still circulating fiat currency, having been first issued in 1694.
The GBPT will be redeemable with the British pound at a ratio of 1 to 1. That means it will put the GBP on the blockchain, and this will help to make international transactions faster and less costly.
The fifth stablecoin from Tether
The GBPT will be the fifth stablecoin to be issued by Tether. The others are USDT, EURT, CNHT, and the MXNT. USDT is currently the largest stablecoin and is ranked as the third-largest cryptocurrency by market cap, after Bitcoin and Ethereum. The coin was created in July 2014 and was initially referred to as Realcoin. It has been noted to be an extremely important cryptocurrency as it makes it easier for investors to move funds between crypto markets and the traditional financial system. Given its 1:1 peg to the USD, the altcoin doesn’t suffer the same volatility other cryptocurrencies experience.
The USDT has survived for about a decade now and hasn’t lost its peg for a significant time. However, during the huge downturn this spring, many investors and speculators was worried about the peg and for a few hours, USDT was trading at 0.96-0.97 to the dollar. This has created some worries among investors and the general crypto community about the actual reserves. But Tether has condemned what they call false rumours about it’s holdings to back the USDT.
The UK Treasury is planning to make the country a global crypto hub, and it intends to make stablecoins a valid form of payment. This initiative is likely to boost the popularity of the GBPT. However, Crypto Lists wonder if GBPT and USDT will be approved in United Kingdom, since the country got stringent rules and regulations by the FDA. They surely need to update stablecoin regulations in the UK before we can establish that Tether USD is a safe holding for a British and international audience.
GBPT vs the EUROC
The EUROC is a stablecoin that will be released at the end of June by Circle, the same company that issues the USDC. Given the closeness in the development periods of the tokens, it is worth comparing the two. While both of them will be pegged to their respective fiat currencies, the EUROC is set to offer a lot more transparency. This is in line with the current functioning of the USDC. At the moment, Circle and their main stablecoins – USDC and EUROC – are the winners, while Tether is losing market share. Still, it’s worth noticing that Silvergate which are issuing EUROC is based in La Jolla, California – and got nothing to do with the actual euro and ECB that is based in Frankfurt am Main, Germany.
Meanwhile, Tether has been a more controversial company for a long time because its audits are performed by untrustworthy bodies, according to many observers. For this reason, it isn’t exactly clear whether the GBPT will actually be backed by actual fiat currencies and real-world assets. That being said, Tether has managed to gain a lot of trust in the community since the coin has been functioning relatively well since it was released. The company has also said that it is ready to work with regulators in the UK to ensure that the coin gains the same level of adoption as the USDT.
Both the EUROC and GBPT will first be issued on Ethereum, and they will all expand to other blockchains over time.
What Will GBPT Be Used for?
Long-time readers of Crypto Lists understand that stablecoins are essential to the functioning of the greater crypto market. With the GBP-pegged altcoin, traders will be able to enter and exit trading positions quickly, and this is important in times of high market volatility. The stablecoins can also be turned into fiat currencies fairly easily.
As noted earlier, the GBP is among the most-used fiat currencies in international trade. With the GBPT, international payments will be completed faster and for lower fees. People who like to make payments for goods and services using cryptocurrencies will also find the stablecoin quite useful as it will shield them from market volatility.
Conclusion of GBPT
Tether has announced the release of a new stablecoin, the GBPT, that will be backed by the pound sterling. This will be the fifth stablecoin to be created by the company. The other ones are the USDT, EURT, CHNT, and MXNT. The GBPT is expected to gain as much adoption as the USDT, especially since the company is willing to work with UK regulators. Recently, the UK Treasury released a statement noting that they intend to make the country a hub for cryptocurrencies, and stablecoins are set to be central to this initiative.