Following Wednesday’s (June 22) announcement that Tether, the world’s largest stablecoin issuer, is set to launch a new pound-pegged cryptocurrency, businesses and traders will be watching developments closely. United Kingdom.
Read more: Tether to Peg New GBPT Stablecoin to British Pound
“We believe the UK is the next frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets,” said Paolo Ardoino, chief technology officer of Tether, in a company press release.
On regulation, Ardoino added that “Tether is ready and willing to work with UK regulators to make this goal a reality,” a statement likely made in reference to government plans to introduce stablecoin regulations. later in the year.
See also: UK Government Pushes For Crypto Sandbox And Stablecoin Regulation
And alongside the UK government considering regulating stablecoins, the Bank of England is also consulting on blockchain technology and its possible application in issuing a central bank digital currency (CBDC).
Of course, Tether isn’t the only company paying attention to the UK’s evolving regulatory framework.
When it comes to using cryptocurrencies for day-to-day business transactions, many companies see regulation as a key issue. Data from the PYMNTS report, “Cryptocurrency, Blockchain, and Cross-Border Payments,” found that 48% of cross-border businesses consider the legal framework to be a very important variable for using cryptocurrency as a payment method.
Read the report: Cryptocurrency, blockchain and cross-border payments
On the cross-border issue, stablecoins have made transferring funds between two parties in different countries cheaper, faster and more transparent than existing cross-border solutions, with the PYMNTS report showing that 29% of international businesses now use them.
Additionally, unlike central bank digital currencies (CBDCs), stablecoins are readily available to people around the world. For example, while the advance digital pound may require a pound bank account to be held and subject to Bank of England rules, the GBPT exists in a different asset class and will be subject to less stringent controls.
Negotiate stable cable
While Tether cannot claim credit for minting the first-ever pound-pegged stablecoin, it is certainly the largest issuer to have done so yet. Given that USDT has a market capitalization of nearly $70 billion and is listed on just about every major crypto exchange, it seems likely that GBPT will follow suit.
As a result, a stablecoin version of one of the most traded currency pairs, GBP/USD, may soon be available.
Known among forex (FX) traders as “trading the cable”, according to FX intelligence platform fxssi.com, the GBP/USD pair currently accounts for 11% of all global currency trades.
The idiom has its origins in the mid-19th century, when currency quotes were communicated via the world’s first transatlantic telegraph cable between the United Kingdom and the United States. Now that crypto traders will be able to hold currencies pegged to both the pound and the dollar, it looks likely that they too will be riding the ropeway.
Once again, however, regulators hold the key to the future and their reaction will shape the emerging stablecoin-FX.
The PYMNTS Cryptocurrency Report also found that 36% of cross-border businesses view regulations as essential in the context of using cryptocurrency to manage currencies.
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