Tether launched MXNT, a token pegged to the Mexican peso, on Thursday, adding it to its stablecoin list.
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The token will initially be compatible with Ethereum, Tron and Polyong blockchains, the company said. MXNT is Tether's first foray into Latin America and joins the company's other stablecoins: USDT (U.S. dollar), EURT (euro) and CNHT (Chinese yuan).
Mexico is "a prime location to become Latin America's next crypto hub," Tether said, citing a Triple A report that 40% of Mexican businesses are interested in adopting blockchain and cryptoassets in some form.
"We have seen an increase in the use of cryptocurrencies in Latin America over the past year, which has made us realize that we need to expand our offering," said Paolo Ardoino, Tether's chief technology officer. The company announced the trial as a "test program" in Latin America that it hopes will pave the way for the creation of other fiat money-linked tokens in the region.
Tether also pointed to the "unique opportunity" in Mexico due to the multi-billion dollar flow of remittances into that country and the difficulty in transferring funds.
In 2021, Mexico was the world's third largest recipient of remittances, after China and India. According to Mexico's central bank, citizens living abroad sent $51.6 billion to the country last year.
Tether is not the first company to notice the Mexican remittance phenomenon, which previously attracted the attention of major crypto providers such as Coinbase, Bitso and Circle. Earlier this year, Coinbase (COIN) launched a cash withdrawal service that allows local pesos to be exchanged for cryptocurrencies at more than 37,000 physical outlets and retail stores across the country.
In November, Latin American exchange Bitso partnered with Circle to launch an international remittance product that allows small businesses and freelancers to exchange their dollars for stablecoins, send them to Mexico, and then cash them out in pesos. A month later, Bitso also launched a cross-border B2B payment option in partnership with Tribal, allowing small and medium-sized businesses to convert Mexican pesos into Stellar USDC.
This article was translated by Marina Lammertyn.