Tether launches a stablecoin pegged to Pesos on Ethereum, Tron and Polygon
Tether launched the MXNT stablecoin pegged to the Mexican Peso on Ethereum, Tron and Polygon networks
By Shashank Bhardwaj
Tether Operations Limited announced the launch of MXNT Tether tokens pegged to the Mexican Peso on Thursday. It is the company behind the largest stablecoin, Tether (USDT), by market capitalisation.
MXNT will be officially launched on Polygon, Ethereum, and Tron networks. Tether believes that a digital Peso like MXNT will be extremely beneficial to Mexico's remittance industry. MXNT is pegged 1:1 to the Mexican Peso. This means that each MXNT token carries a value equivalent to one Peso.
Tether believes that there is a distinct opportunity to offer a less expensive alternative for asset transfer in the Mexican region. The company cited that 40 percent of Mexican companies want to ‘adopt blockchain and cryptocurrencies in some form,’ which shows that blockchain and crypto demand amongst Mexican corporations is rising.
Paolo Ardoino, Tether’s chief technology officer, said, “We have seen a rise in cryptocurrency usage in Latin America over the last year, making it apparent that we need to expand our offerings. MXNT can minimise volatility for those looking to convert their assets and investments from fiat to digital currencies.”
Furthermore, the company mentioned that the “multibillion-dollar flow of remittances into Mexico, as well as the difficulties associated with money transfers, have created a once-in-a-lifetime opportunity for stablecoin usage and adoption." The stablecoin issuer company added, "the creation of MXNT puts Mexican Peso on the blockchains and provides a faster, less costly option for asset transfers."
It is noteworthy that many regulators continue to be skeptical of stablecoins despite their increased use cases. This is because many stablecoins have shown lesser reliability than their advertisements promised. U.S. Secretary of the Treasury Janet Yellen testified before the Senate Banking Committee on May 10 that ‘Stablecoins pose risks to financial stability.’
She went on to say that it was ‘urgent’ for Congress to pass new legislation governing stablecoins. For instance, the peg of the UST stablecoin by TerraUSD was guaranteed by a complex self-executing algorithm rather than actual cash reserves. However, it reportedly lost its peg earlier this month and collapsed dramatically.
Earlier in May, USDT by Tether began to show signs of stress as well. It was trading below $0.99 on several major cryptocurrency exchanges. However, Tether's chief technology officer, Paolo Ardoino, assured the crypto community that 300 million USDT tokens could be redeemed in a single day ‘without breaking a sweat.’ The company announced the transfer of $1 billion USDT from Tron's blockchain to Ethereum and Avalanche (AVAX) on the same day. The chain swap was announced amid market panic caused by the collapse of TerraUSD's UST.
Further, just last week, Tether reported that it had reduced its commercial paper holdings in order to emphasise ‘that Tether is fully backed and that the composition of its reserves is strong, conservative, and liquid,’ as Ardoino explained.
Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash