Crypto giant Tether to launch sterling-pegged stablecoin

Stablecoins are cryptocurrencies designed to keep a steady value against traditional currencies

Major crypto firm Tether said on Wednesday it will launch next month a "stablecoin" pegged to the British pound, a move that comes as London draws up plans to regulate the fast-growing type of digital currency, Qazet.az reports.

Stablecoins are cryptocurrencies designed to keep a steady value against traditional currencies or commodities such as gold. They seek to avoid the volatility that makes bitcoin and other digital tokens impractical for most commerce.

British Virgin Islands-based Tether's dollar-pegged stablecoin is the third-largest by market capitalisation, with some $68 billion in circulation.

It is the predominant medium for moving funds between crypto and regular cash. Its tokens are underpinned by a mixture of dollars, government debt and short-term debt issued by companies.

As the demise of terraUSD sparked a sell-off in crypto markets, Tether broke its 1:1 peg with the dollar, shaking investors' faith in a key cog in the crypto economy.