Tether, the company behind crypto’s most popular stablecoin has introduced a new stablecoin that is tied to the Mexican peso.
Tether announced the launch MXNT, a new stablecoin that is backed by Mexico’s national currency, The Peso. MXNT will initially be available on three major blockchains: Ethereum and Tron. The company stated this in a post.
MXNT is the successor to the company’s stablecoins USDT and EURT. They are pegged to the U.S. Dollar, Euro and Chinese Yuan respectively.
Paolo Ardoino (CTO of Tether) stated that there has been a significant increase in cryptocurrency usage in Latin America in the past year. This has led to us needing to expand our offerings.
Ardoino says that a Peso-pegged stablecoin “will provide a store value for those in emerging markets, in particular Mexico,” and minimize volatility “for those who want to convert assets and investments from fiat currencies to digital currencies.”
Tether also mentioned the report of cryptocurrency payments company Triple A as a reason for the launch MXNT stablecoin. It stated that 40% of Mexican businesses are interested in adopting blockchain and cryptocurrencies in one form or another. 71% of this segment is focused on cryptocurrency use.
Tether believes that Mexico is the “prime location for the next Latin American cryptocurrency hub.”
The company stated that MXNT’s launch will be a test ground for new users in Latin America and pave the way to future fiat-pegged currencies being launched in the region.
Reserves of USDT and Tether
Tether wants to capitalize on the growing interest of cryptocurrencies in Latin America. However, speculation has been long-running that the USDT stablecoin, which is dollar-pegged, is not fully backed up by foreign assets. Tether paid $18.5 million to the New York Attorney General and agreed to submit quarterly reports on the operation.
In the midst of market volatility due to the collapse Terra’s UST algorithmic safecoin, USDT temporarily lost its peg against the greenback.
Tether has released its Q1-2022 assurance report. It claims that USDT’s commercial paper reserves have fallen by 16.8% since 2021.
Corporations issue commercial paper as a security to cover short-term debt obligations such as inventory or payroll.
Cash and cash equivalents accounted for 86% of Tether’s $82 billion reserve as of March 31. The rest was spread across secured loans ($3billion), corporate bonds ($4billion), and other investments such as cryptocurrencies ($5billion).
Ardoino also stated that Tether had reduced its commercial paper holdings further by 20%. This will be reflected on the company’s Q2-2022 report.
