Fintech company Blackfridge has released Poundtoken, “the first GBP stablecoin regulated in the British Isles”, under the GBPT ticker.
Poundtoken secured a listing on Gate.io on July 11, with Bitcoin (BTC), Ethereum (ETH) and Tether (USDT) trading pairs available.
Poundtoken is launched...@Poundtoken @Blackfridge_ @CityAM_Crypto @CityAM #Poundtoken #GBPT #StableCoin #stablecoins https://t.co/Wvp3OscuUY
— Darren Parkin (@EditorParkin) July 11, 2022
Blackfridge claims that GBPT is fully backed by GBP reserves, although the company’s first attestation report is yet to be disclosed.
The “regulated” aspect of the stablecoin refers to its licence distributed by the offshore jurisdiction of the Isle of Man Crown Dependency where the company is registered.
While Poundtoken falls under the purview of the Isle of Man Financial Services Authority (IOMFSA), investors should take note that under the conditions, “customers’ money is not protected by a compensation scheme”.
Compensation is a hot-button issue in the crypto space, following the raft of bankruptcies and withdrawal freezes plaguing the market.
But a lack of compensation is also the standard for loosely regulated crypto companies.
Earlier this year, the NASDAQ-listed Coinbase exchange faced scrutiny when May filings classified its users as unsecured creditors.
Blackfridge has enlisted Big Four accounting firm KPMG to oversee monthly attestation reports which must be made publicly available under IOMFSA conditions.
Who’s buying?
With the Pound on a two-year low against the US dollar, perhaps it’s only fair to ask: What purpose does a Pound-backed stablecoin serve right now?
Though extremely volatile (always conduct due diligence first!), decentralised finance (DeFi) platforms can offer considerably higher rates of return compared to the banks, while yield farming can compound your earnings further.
As a cryptocurrency pegged to the Pound, British traders, or anyone with a preference for the Pound, can gain exposure to these DeFi options without dealing with the wildly fluctuating price of Bitcoin or Ethereum, let alone smaller-cap altcoins.
Yes, even the spiralling value of the Pound is considered a safe haven compared to the battered crypto markets.