British traders will be able to use cryptocurrencies more easily with the launch of a sterling product.
An unreliable British Virgin Islands-based company that is behind one of the most important cryptocurrencies in the world has launched a new token tied to the pound.
Tether Operations Limited which manages so-called “stablecoins will launch a sterling product in July to make it easier for British investors to access many crypto trading platforms.
British regulators will likely be interested in the launch, especially after Tether was last summer fined by New York’s attorney general for “deceiving” investors.
Tether’s fourth pegged cryptocurrency, GBPT, will be one-to-one backed by the British Pound.
Many cryptocurrency businesses use stablecoins to fund their operations. Many of these businesses have difficulty accessing regular bank accounts and are forced to turn to quasi-currencies. Tether acts as a broker, accepting deposits in sterling or dollars and issuing crypto equivalents.
With over $68bn in circulation (£55bn), the company’s stablecoin has been crucial for the operation of the global cryptocurrency market.
British investors will find it easier to access cryptocurrency through the launch of a sterling stablecoin. Trading platforms will be able to accept more GBP deposits.
Regulators will likely be concerned by Tether’s expansion into the UK.
After finding that Tether had not had enough money to support its stablecoin, Letitia James, New York’s attorney general, fined Tether along with related entities $18.5 million.
Attorney General James stated that “Tether’s claim that its virtual currency was completely backed by US Dollars at all times” was a fabrication. These companies concealed the real risk to investors and were operated and managed by unlicensed, unregulated individuals and entities that dealt in the darkest corners of the financial system.
Tether denied wrongdoing, but said it would increase disclosures regarding its reserves.
The Bank of England and Financial Conduct Authority both declined to comment on the launch of the GBPT.
Tether cited as the main motivator for its decision to increase sterling its use of the Treasury’s stablecoin, which it has dubbed ‘Britcoin.
Paolo Ardoino (Tether’s chief technical officer) stated that “We believe the United Kingdom is a frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets,”
“Tether is willing and able to work with UK regulators in order to achieve this goal and looks forward to the continued adoption of Tether stablecoins.”
A Treasury spokesperson stated that the Treasury is committed to placing the UK’s financial sector at the forefront of cryptoasset technology innovation and technology. Stablecoins can be used to pay for goods and services. This allows them to grow and operate safely while reducing financial stability risks.
