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Crypto giant Tether targets UK investors with sterling ‘stablecoin’

·2-min read
bitcoin - REUTERS/Dado Ruvic/File Photo
bitcoin - REUTERS/Dado Ruvic/File Photo

A controversial British Virgin Islands-based company behind one of the biggest cryptocurrencies in the world is targeting British investors with a new token pegged to the pound.

Tether Operations Limited, which runs so-called “stablecoins”, will launch a sterling product in July, making it easier for British investors to access many crypto trading platforms.

The launch is likely to draw the attention of British regulators after Tether was last year fined by New York’s Attorney General for “deceiving” investors.

GBP₮, Tether’s fourth pegged cryptocurrency, promises to be backed one-to-one by the British pound.

Stablecoins are often used by cryptocurrency businesses, many of which struggle to access regular bank accounts and must turn to quasi-currencies instead. Tether effectively acts as a middleman, taking sterling or dollar deposits and issuing crypto equivalents.

The company’s main stablecoin, which is pegged to the dollar, has become crucial to the functioning of the global cryptocurrency market, with over $68bn (£55bn) in circulation.

The launch of a sterling stablecoin should make it easier for British investors to access cryptocurrencies as it will allow trading platforms to more easily accept GBP deposits.

Tether’s expansion to the UK is likely to draw scrutiny from regulators.

New York attorney-general Letitia James fined Tether and related entities $18.5m last year after finding it had not always had enough dollars to back its stablecoin one-for-one.

“Tether’s claims that its virtual currency was fully backed by US dollars at all times was a lie,” Attorney General James said at the time. “These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system.”

Tether did not admit wrongdoing and said it would improve disclosures about its reserves.

Both the Bank of England and the Financial Conduct Authority declined to comment on the launch of GBP₮.

Tether cited the Treasury’s decision to launch its own stablecoin, dubbed 'Britcoin', and its pledge to make the UK a global crypto hub as key motivators for its decision to expand to sterling.

“We believe that the United Kingdom is the next frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets,” said Paolo Ardoino, Tether’s chief technical officer.

“Tether is ready and willing to work with UK regulators to make this goal a reality and looks forward to the continued adoption of Tether stablecoins.”

A Treasury spokesman said: “We are firmly committed to putting the UK’s financial services sector at the forefront of cryptoasset technology and innovation. This includes creating the conditions for stablecoins - when used as a means of payment - to operate and grow safely, while mitigating potential financial stability risks.”

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