Tether, the world’s most widely used stablecoin, is issuing MXNT, a new token pegged to the Mexican peso.
Tether issues a stablecoin pegged to the value of the Mexican peso
Tether, the platform behind the world’s largest stablecoin, USDT, with over 76 billion in capitalization, has decided to launch a new token pegged to the Mexican peso.
That comes after the big scare over the failure of the UST algorithmic stablecoin linked to the Terra project, which rattled the entire stablecoin ecosystem.
Tether has decided to increase its offerings by also opening up to the large Latin American market, launching the first major stablecoin linked to the value of the mexican peso, which will initially be available on the Ethereum, Tron, and Polygon blockchains.
Paolo Ardoino, CTO of Tether, introducing the project, said:
“We have seen a rise in cryptocurrency usage in Latin America over the last year that has made it apparent that we need to expand our offerings,” Paolo Ardoino, CTO of Tether, said in a statement for presenting a project. “Introducing a Peso-pegged stablecoin will provide a store of value for those in the emerging markets and in particular Mexico.”
In the company’s intentions, this project should be a test to assess the potential of new markets, such as precisely South America. The choice comes after extensively exploring the main ones of the U.S. dollar (USDT), Euro (EURT), and the Chinese Yuan (CNHT).
Tether sees a new opportunity in Mexico
Mexico’s market is very promising because of its very high incidence of remittances from abroad, placing it third in the world as a recipient country of remittances from abroad. It totaled $21.6 billion in remittances in 2021, up 27 percent from 2020.
Tether has become a very reliable and secure alternative currency for this particular market segment, and it is clear that building a currency pegged to the value of the Mexican peso can be a valuable tool to intercept a portion of these transfers.
Moreover, according to some statistics, at least 40 percent of companies are interested in using blockchain in their business. Should the project find positive results, it is easy to imagine that the company may soon create new stablecoins linked to currencies in the area.
A press release on the company’s website states:
“The multibillion-dollar flow of remittances into Mexico and the difficulties involved with money transfers have created a unique opportunity for stablecoin usage and adoption.”
This announcement is also probably meant to ease some of the fears that have surrounded Tether for months about its actual reserves, which some say are not as certain as, on the other hand, the company has long claimed.
The issue is related to the fact that in order to maintain its peg to the U.S. dollar, stablecoins must be secured with assets such as cash, bonds, and Treasury bills in order to keep the price fixed at $1. The company would hold total assets of at least $78.6 billion, of which only about $4 billion is in cash.