Tether Operations Limited, creator of the largest stablecoin by market cap Tether (USDT) has launched a stablecoin that is pegged to the Mexican Peso.
According to a Thursday, May 26 announcement, the firm stated that its new stablecoin would be known as “Tether tokens” and will be pegged 1:1 to the Mexican Peso. The stablecoin will trade under the ticker symbol “MXN₮”. The company also stated that the new stablecoin will initially be supported on three blockchains namely Ethereum, Polygon, and Tron.
According to Tether, the move was necessitated by increased demand for stablecoin usage in Mexico, with existing financial remittance channels posing difficulties to a majority of users in the country. Last year Mexico was ranked among the top five countries globally with the most remittance recipients in US dollars by the world bank. Nationals living abroad sent $51.6 billion back home in 2021 according to the country’s central bank.
According to data from Triple-A, a Mexico-based cryptocurrency payments company, 40% of Mexican companies are considering adopting blockchain and cryptocurrencies for their businesses with 71% in that segment specifically focused on using cryptocurrencies. To Tether, this demand created an opportunity to introduce a stablecoin that would put the Mexican Peso on the blockchain and “provide faster and less costly options for asset transfers”. Further, the company stated that its genesis move would “pave way for future fiat-pegged currencies in the region to be launched.”
This demand has also caught the attention of other global crypto firms including Coinbase, Bitso, and Circle launching crypto services in the Latin American Nation.
“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,” said Paolo Ardoino, CTO of Tether. “Introducing a Peso-pegged stablecoin will provide a store of value for those in the emerging markets and in particular Mexico. MXN₮ can minimize volatility for those looking to convert their assets and investments from fiat to digital currencies. Tether customers in this entirely new market will be able to benefit from the same transparent customer experience.”
The new stablecoin now becomes the fourth in addition to three other fiat-pegged tokens Tether has in the market. These include the Chinese Yuan pegged CNH₮, the Euro-pegged EUR₮ and the US dollar-pegged USD₮.
Tether’s move comes after two brutal weeks of stablecoins de-pegging from the US dollar following UST’s collapse. USDT was also not spared in the onslaught and fell as low as $0.95 in the second week of May. Tether however managed to calm the depeg fears with a strong reserves report.