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Tether Launches Tokens Pegged to the Mexican Peso on Ethereum, Tron, and Polygon

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Tether Launches Tokens Pegged to the Mexican Peso on Ethereum, Tron, and Polygon

Tether Launches Tokens Pegged to the Mexican Peso on Ethereum, Tron, and Polygon

The stablecoin issuer Tether Operations Limited has announced the company has launched a new fiat-pegged token tied to the value of the Mexican peso. According to the team the newly launched MXNT tokens will be initially hosted on Ethereum, Polygon, and Tron.

MXNT Stablecoin Is Pegged 1:1 to the Mexican Peso

The stablecoin and blockchain firm Tether has revealed it has launched a new fiat-pegged token that will join the company’s suite of stablecoins. Tether has launched MXNT, a stablecoin that is pegged to the value of the Mexican peso.

Tether’s other fiat token offerings include the popular USDT, which is pegged to the U.S. dollar, and EURT, which is tied to the value of the euro. The company also offers CNHT, an offshore Chinese yuan-pegged token, and tether gold XAUT, a token pegged to the value of one ounce of fine gold.

Tether Launches Tokens Pegged to the Mexican Peso on Ethereum, Tron, and Polygon

MXNT’s launch will officially start on Polygon, Ethereum, and Tron. Tether said it believes a digital peso will be quite beneficial to Mexico’s remittance industry. “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,” Tether’s announcement on Thursday details. The company added:

The creation of MXNT puts Mexican Peso on the blockchains and provides a faster, less costly option for asset transfers.

Tether USDT is the largest stablecoin in existence today, as it currently has a market valuation of around $73.2 billion. The token’s market capitalization represents 5.77% of the $1.27 trillion crypto economy.

Out of the $86.43 billion in digital currency trade volume on Thursday, tether’s volume is around $45.42 billion, or 52.55% of today’s global trade volume. In terms of bitcoin (BTC) trading pairs, USDT is the top pair with bitcoin, capturing 55% of today’s BTC trade volumes. Tether says the launch of MXNT will be a “testing ground for onboarding new users in the Latin American market.”

Paolo Ardoino, the CTO of Tether, detailed during the announcement that the company has seen digital currencies rise in popularity in Latin America. “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,” Ardoino said in a note sent to Bitcoin.com News.

The Tether CTO continued:

Introducing a Peso-pegged stablecoin will provide a store of value for those in the emerging markets and in particular Mexico. MXNT can minimize volatility for those looking to convert their assets and investments from fiat to digital currencies.

Just recently, Tether published the firm’s USDT May 2022 assurance report after the recent Terra blockchain UST fallout. Circle, the usd coin (USDC) stablecoin issuer, also released an assurance report in May and recently explained its plans to publish USDC attestation reports on a weekly basis.

What do you think about the stablecoin issuer Tether launching a token pegged to the Mexican peso? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Bitcoin Miner Sell-Offs Could Keep Prices Low, Says JP Morgan

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Bitcoin Miner Sell-Offs Could Keep Prices Low, Says JP Morgan

Strategists at JPMorgan Chase & Co. believe the current Bitcoin sell-off by miners could make it difficult for the price of the asset to bounce back, especially if the trend continues.

In a note released yesterday, they pointed out that publicly listed Bitcoin miners account for 20% of all reported Bitcoin sales in May and June. It’s likely that private miners are also selling at the same rate or even higher, given that they have limited access to the capital markets.

The massive sell-off is a sharp turn in the strategy that has mostly been about holding block rewards until the market conditions get better. But the drop in Bitcoin prices and its effect on miners’ profitability means many are now struggling to meet operating costs.

According to the strategists,

Offloading of Bitcoins by miners, in order to meet ongoing costs or to deliver, could continue into Q3 if their profitability fails to improve.

Already, it has likely “weighed on prices in May and June, though there is a risk that this pressure could continue.”

However, JP Morgan strategists point out that it’s not all gloomy. One silver lining is a drop in the cost of mining Bitcoin from around $18k – $20k earlier in the year to $15k this month. This is due to the drop in hash rate and mining difficulty over the past two weeks.

Meanwhile, the cost of production varies based on the size of the miner. According to Arcane Crypto, large miners spend around $8,000 to produce one Bitcoin. Meanwhile, Securitize Capital says the cost of production might be over $20k for some miners after adding overhead costs and interest rates.

Bitcoin Price 69% Away From ATH

Bitcoin price has declined by more than half compared to its value at the beginning of the year. It’s also down 69% from its all-time high as it hovers around the low 20k range in the last few weeks.

Several factors have pushed the crypto markets over the edge, including the crash of Terra’s ecosystem and the near-insolvency of crypto firms such as Celsius and 3AC. But the Fed hike in interest rates has been the primary factor behind the drop.

Almost every other niche in the space, like non-fungible tokens and decentralized finance, has reported losses too. With most miners also having debt obligations, selling their Bitcoin stash appears as the best course of action to stay afloat.

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Bitcoin Energy Consumption Declines as Miners Grapple With Falling Revenue

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Bitcoin Energy Consumption Declines as Miners Grapple With Falling Revenue

Bitcoin mining is no longer consuming as much energy as before, according to a Cambridge Bitcoin Electricity Consumption Index report, which shows a 25% decline in energy use since the start of the month.

Per the index, the current energy consumption of Bitcoin is 10.65 gigawatts, significantly lower than the 14.34-gigawatt on June 6. This means its annualized consumption is at 93.33 terawatt-hours, putting it below countries like Argentina and Norway in energy consumption.

At its peak, the BTC network needed 16.09 GW of power. The drop in the consumption from its record high of 150 terawatt-hours in May is likely due to the drop in mining hash rate. 

Bitcoin hash rate is the computing power needed to create a block on the Bitcoin network and has dropped to 199.225 exahash per second (EH/s) over the last two weeks. This came after the mining difficulty reached a record high of 231.428 EH/s on June 13. It has now dropped by almost 14% since then.

The index estimates the energy consumption by using a profitability threshold using “different types of mining equipment as the starting point.” 

With Bitcoin prices nosediving to below $20,000 this month, some miners have also gone offline as mining proved less profitable. This explains the consecutive drop in the consumption and hash rate.

Miners are Selling Their Bitcoin Holdings

Additionally, the drop in the price of Bitcoin has left several miners in a lurch as they struggle to sustain their operations. A recent report by Arcane research shows that publicly traded Bitcoin miners sold all the coins they mined in May.

This is usually against the strategy of most miners, which is to hold their Bitcoin for better market conditions. But with profitability nosediving and many miners struggling to generate a positive cash flow, they are selling their holdings. 

According to the report, many miners sold their Bitcoin to cover operational expenses and pay off debts. One of such is Bitfarms which decided to sell 3000 Bitcoin for $63 million to improve corporate liquidity.

Energy consumption of Bitcoin mining has been one of the major criticisms of the network and cryptocurrency industry. But recent research by Michel Khazzaka reveals that the traditional banking sector uses 56% more energy.

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Coinbase to Offer Nano Bitcoin Futures Contracts via Third Party Brokerages

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Coinbase to Offer Nano Bitcoin Futures Contracts via Third Party Brokerages

Coinbase will list a derivatives product called the nano futures contract on Monday.

This will be the first product listed on the Coinbase Derivatives Exchange, offering investors the opportunity to buy a contract linked to the price of one-hundredth of a bitcoin. Customers can purchase the Nano futures contract through third-party brokerages. Customers will not be able to buy the nano futures contract from Coinbase directly until the exchange receives a license to operate as a futures commission merchant. The exchange first applied for the license on Sept. 16, 2021.

U.S. customers have a healthy appetite for crypto derivatives

Coinbase floated the idea of bringing derivatives to its U.S. customer base after purchasing derivatives exchange FairX in January this year.

Americans have long been trading derivative products on foreign exchanges, sinking their teeth into high-leverage products that U.S. exchanges have lacked, indicted by the volume of crypto derivative trades in December 2021 surpassing that of spot trading. Binance alone recorded $52.5 billion in derivative trade volume during the 24 hours ending Friday afternoon, compared to $12.7 billion in spot products. Coinbase enjoyed $1.7 million in spot trading during the same period.

It’s worth bearing in mind that the new nano futures contract will not offer leverage-type bets that drive volume on exchanges like Binance.

Challenges Coinbase faces

A report by Barron’s suggests that it would take a long time for derivatives products to generate significant income for the company.

The new Coinbase product will enter a market of established crypto derivative products, while the company battles cash flow problems.

In March, the CME Group announced micro futures contracts linked to one-tenth of the price of bitcoin and Ethereum.

To add pressure, Moody’s Investors Services recently reduced Coinbase’s guaranteed senior unsecured notes from Ba2 to Ba1, relegating its corporate debt to “junk” status, with the potential for future downgrades. Ba ratings are assigned by Moody’s to credit obligations containing speculative components, considered to be a serious credit risk. Moody’s cited Coinbase’s reduced revenue and cash flow due to the current crypto market downturn as reasons for the downgrade. Coinbase’s recent employee layoff did not count in its favor, with the rating agency still seeing threats to the company’s profitability.

Dan Dolev, a senior analyst at Mizuho, believes that the new product does not address the central issue of competitors offering zero trading fees, which would severely affect revenue if Coinbase were to compete.

Coinbase’s shares fell precipitously on May 3, 2022, from $130.15 to $62.71 at market close on Friday.

What do you think about this subject? Write to us and tell us!

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