In the midst of a controversial year regarding its cash reserves, the stable coin Tether (USDT) offered a comforting piece of news, at least according to a Bloomberg report: the company Tether Ltd., who administrates the dollar-pegged token, has enough dollars (USD) the current USDT supply in the market.
As of the moment of this writing, there are approximately 1.8 USDT tokens circulating out there, and Tether appears to have enough cash reserves to back that number up, according to some bank statements.
Over four separate months at least, Tether had enough US dollars to cover the coin’s supply. Sure, the piece of news does not nearly have the same validity as a full audit; it serves as a proof that there are more than words from Tether’s side.
Controversy is surrounding Tether since last year, following a series of legal situations and bank “reshuffles” that included rumors about intentional price manipulations just a few months ago.
Tether, mainly used by traders and exchanges as a mean to move around value in an international plane, issues and backs up each token with $1. The statements read that Tether Ltd. had a combined fiat bank balance that equaled or even surpassed the circulating supply between September 2017 and July 2018, the last month in which such information could be had. The company also produced an additional $6.6 million in interest in the first six months of the current year.
According to bank statements from September2017, the firm had $452.9 million in banking accounts at Noble Bank, Puerto Rico, and Bank of Montreal; when there were 435 million USDT out there at that time. A similar situation presented itself in the following months up to July 2018.
Tether Ltd. and the crypto exchange Bitfinexreceived subpoenas from US law enforcement agencies at the end of last year. Both firms share the same CEO in the person of Jan Ludovicus van der Velde. Additionally, both were accused of manipulating the token’s price last months by “burning” USDT. The coin, which by design is supposed to be pegged with the US dollar in a 1:1 proportion, has seen its value fluctuate in the last few weeks.
A Bank Switch
During the tumultuous time, Tether changed its banking partner and gave its trust to Deltec while at the same time, illiquidity claims caused Bitfinex to come out and turn down reports of it having anything to do with Tether’s banking associates.
After switching financial institutions in October 2018, Tether published a Deltec letter on November 1st
As traders and investors hedge their losses, Tether and other stable coins have seen their popularity levels rise through the roof, in a moment in time in which Bitcoin (BTC) and the top altcoins are collapsing to all-time low levels, in some cases.
In the middle of October, in a moment in which Tether’ credibility was somewhat damaged because of all the allegations, it went as low as $0.92, but soon after, the company released a statement saying that “all USDT in circulation are sufficiently backed by U.S. dollars” and“assets have always exceeded liabilities.” Right now, USDT is trading at $1.01.
By Andres Chavez