On May 26, 2022, Tether expanded its stablecoin offering to include MXNt in the Ethereum, Tron, and Polygon networks, a currency pegged to the Mexican Peso. Strategically, Mexico has relevant importance in the cryptocurrency ecosystem. There is a massive presence of leading crypto companies in the market whose proposals focus on Mexico.
Before Tether, the concept was tested on a smaller scale, there were other Stablecoin proposals pegged to MXN. With Tether in the equation, its implementation can accelerate and expand significantly. First of all, because of the financial infrastructure that the company has already established and created under years of experience, knowing the market in-depth, thus why Tether is the leader in this market. The trust of its users is its biggest asset. Trust alone can move prominent players in Mexico because this nation has valuable geopolitical attractions.
The MXN has a growing volume in its participation in the foreign exchange market, remaining in the top 15 of the OTC markets and with increasing percentage participation. In fact, at present, it is a tradable currency in most of the platforms where the FOREX market is available.
This is mainly due to Mexico’s weight in international trade. Mexico has had significant growth in the global market, maintaining important levels even in 2020 with the trade restrictions due to the pandemic. Tether has a lot to offer in this context, from proven implementations with its other stablecoins.
If we take the point of international trade, the MXNt token can facilitate transactions, eliminate many intermediaries, significantly lower costs, and speed up the trade cycle. A practical way of looking at it is using Bitfinex as a reference, which has all the Tether stablecoin available. In this exchange, a FOREX-type market could be created on a smaller scale, facilitating the entry and exit to MXNt on time for both suppliers and customers, supporting the economy’s growth.
Let’s not also forget that Mexico has a considerable remittance market. In the last four-month period, it reached US 17,240.09 million. If we take the adoption of USDt in the remittance markets as a reference, there is a basis to be optimistic about implementing MXNt. Tether has fewer barriers than traditional banking and requires fewer logistics to execute the same action in a less costly way. In 2021 a total of 51,585.7 million dollars in remittances entered Mexico, with an average value of 361 dollars. Tether has all the technical capacity to improve the conditions of these remittances. Even the same market has positively reacted towards Tether before adopting USDt as a bridge between remittances in countries such as Colombia and Venezuela.
There is an estimated population of 38 million Mexicans in the US alone, especially in the south of the country, leading to phenomena such as those of the US chain Pizza Patrón, where Mexican currency has been accepted tender in its branches since January 1, 2007. In the same year, 21% of retail firms in the southern United States accepted Mexican pesos, including Walmart, which takes Mexican pesos in all its branches near the Mexican border. The H-E-B chain also takes Mexican pesos in its branches across the United States, demonstrating how much the currency circulates in the country. These are all areas where Tether can improve the consumer experience and expand its use as a means of payment, as it is easier and cheaper to exchange for another currency than conventional cash.
In a context where 40% of Mexican companies are looking to adopt in some form blockchain and cryptocurrencies. According to the company TripleA, Mexico makes an ideal location to be a financial blockchain hub in the region; this initiative can be exported to the rest of the continent, boosting the country’s trade relations and organic growth of the economy. Mexico has a large enough adoption base to become a subject of study like Lugano, but on a much larger scale, being a country with more than 129 million inhabitants and a much more diversified economy.
Tether for economic freedom in Africa and across the globe
For many people in developing countries Tether is a tool for financial freedom. It’s a store of value and a medium of exchange for people to overcome the hardships caused by failing national fiat currencies, click here to watch the CTO of Tether explain more.
In other parts of the world, Tether is commonly used as a means of payment, and the reasons are easy to deduce. First of all, it is a worldwide known unit of account. The general public can calculate the conversion of any other currency to the dollar quickly and you can easily use it for cross-national transactions, which we use our dollar accounts for here in Africa, but here is the thing, the process of having a dollar account in Africa can be quite demanding with truckload disadvantages that come with operating a dollar account, ranging form verification process, access to necessary guarantors and required document not to mention the outrageous dollar account maintenance fee, coupled the fact that the value of your money fluctuates constantly because a sudden rise or fall affects the total balance of your foreign currency account. Tether will save you all that stress, time, and money.
Suppose we add to this factor that the costs per transaction in many of these institutions are unreasonably high. In contrast, to receive Tether, you only need a smartphone and a mobile wallet; only with this can you send and receive Tether anywhere in the world in just seconds. Without barriers or limits, you can send 100,000,000 USDt with the same ease you send 10 USDt. Speaking on investments or maintaining economical value for a long term, national fiat currencies in Africa have dominated the list of worse devalued currencies for a while, the relationship of African currencies with the US dollar and other foreign currencies has been unpredictable, full of heartbreak, and tears. Tether has now become an escape route from hyperinflationary currencies across the world.
Originally, Tether was intended to facilitate cryptocurrency trading and arbitrage between different markets. The logic was clear; speculating between two volatile assets was considerably more complex than speculating with a volatile asset against a stable coin. Thus Tether became a standard for trading on any exchange in the market. Today, Tether has evolved into something bigger. With its recent launch of MXNt, Tether is transcending its primary objective to becoming a necessary element to promote financial education and fundamental economic freedoms, making it a success story as a promoter of the adoption of this technology. The fact remains that there is much more to gain than you can think. Tether is not just a means of saving, investment or transaction, but it is an insurance policy against financial tragedy, if you snooze you lose.