Tether Forays Into Latin America, Launches Mexican Peso-Pegged Crypto

Key Insights:

• Tether launches a new stablecoin pegged to the Mexican peso.
• The new MXNT tokens will receive support from Ethereum, Polygon, and Tron.
• The peso-backed stablecoin would provide a store of value and minimize volatility.

After launching the world’s largest US dollar-pegged stablecoin USDT with a market valuation of over $73 billion, the Euro-pegged EURT, and the offshore Chinese Yuan-pegged CNHT, the Tether blockchain platform is now foraying into the Latin American market.

Alternatively, the crypto industry in Latin America is fresh, especially in digital currency transactions and payments. This is mainly because it is fast and offers low transfer rates. 

For instance, Mexico has embraced the ‘crypto culture’ and constantly delights the crypto community with its crypto-curious moves. The country has been preparing to bring bitcoin (BTC) as a legal tender citing El Salvador.

Stablecoin Backed 1:1 to the Mexican Peso

With a rich crypto-friendly culture, Mexico has now received its first stablecoin pegged to its national fiat Peso.

GM Mexico! 🇲🇽 pic.twitter.com/nhbKhKIuk8

— Tether (@Tether_to) May 26, 2022

Announced Thursday, Tether has launched a 1:1 Mexican-peso pegged stablecoin, dubbed MXNT, built by the team of developers behind USDT.

Paolo Ardoino, CTO of Tether, quotes the increase in cryptocurrency usage in Latin America over the last year, making it apparent to launch a stablecoin offering.

Per triple-A data, 40% of Mexican companies are looking to adopt blockchain and cryptocurrencies in some form. Ardoino said,

“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.”

The peso-backed stablecoin will be initially supported in the Ethereum (ETH), Tron (TRX), and Polygon (MATIC) blockchains, the company noted.

The move marks tether’s first foray into the Latin American market with a dedicated digital currency.

After the collapse of TerraUSD (UST), which shook the crypto world and caused investors to rethink and evaluate their stablecoin investments, investors have cashed out around $10 billion worth of tether since May 11.

However, tether assured that it has more than enough assets to cover the value of its entire circulating tokens. In a May 19 statement, the blockchain firm revealed that the commercial paper in the USDT reserves fell by 17% since the end of 2021. A commercial paper is a form of short-term debt issued by companies to finance their payrolls, payables, and inventories, among other short-term debt obligations.