#USDT is a cryptocurrency issued by#TetherLimited and pegged to the US dollar. Tether is a subsidiary of Bitfinex, one of the world's largest cryptocurrency exchanges, founded in 2014. (It can be said that it was claimed that they were not together in the beginning.)
The launch of USDT comes at a time when the cryptocurrency market is increasingly unstable. Cryptocurrencies were considered risky by traditional investors due to their high volatility. The peg of USDT to the US dollar was aimed at bringing more reliability to the cryptocurrency market. Hence, it has rapidly gained popularity since its release.
Reasons for USDT's success?
First, its peg to the US dollar represents an element of confidence against fluctuations in the cryptocurrency market.
Secondly, USDT has agreements with many cryptocurrency exchanges.
Third, does Tether Limited hold US dollar reserves to support the value of USDT?
Really?
There are some concerns about the stability of USDT. The fact that Tether Limited has not verified its US dollar reserves through an independent audit and that the USDT supply is controlled by Tether Limited leads to criticism that may cause speculative price movements.
These criticisms are countless, but it would be useful to take into account when one of the criticisms is within Blackrock's spot#Bitcoin#etf application. At this point, “in particular, there are allegations that some stablecoins such as Tether are issued without sufficient backing and that if these#stablecoinsare used in bitcoin payments, they may inflate the price of bitcoin and may also be involved in money laundering activities. “As a result of an agreement with the New York Attorney General, Tether was forced to pay fines and cease trading activities for misleading statements.”
Although the above situations have been revealed, it can be said that there are still gaps in this area. Therefore, rather than thinking that nothing will happen to Tether, it should not be forgotten that anything can happen in the financial markets and it should be reminded that every situation should be included in the risk-potential analysis.
