Tether Is Still Unaffected Despite $10 Billion Has Been Withdrawn In 2 Weeks
Tether Is Still Unaffected Despite $10 Billion Withdrawals In 2 weeks
As discussion of rising regulatory scrutiny for stablecoins grows, crypto traders withdrew about $10 billion from Tether USDT in the previous two weeks.
According to CryptoSlate, the circulating supply of USDT fell to $73.3 billion on Monday, down from $84.2 billion on May 11.
On-chain data indicates that traders withdrew $1 billion from Tether on May 20 alone. Terra cryptocurrency UST and LUNA crash fuelled the enormous outflow.
USDT and numerous stablecoins temporarily lost their peg after the UST meltdown. This drew a lot of attention to this crypto type and how “stable” it was.
Tether has previously said that USDT had a one-to-one dollar bank account backing, but now claims that it uses various assets as security, including commercial paper and even digital tokens. It revealed this after it reached a settlement with New York authorities.
As part of the settlement, the company must declare its reserves every quarter. According to the most recent attestation report, it has decreased its commercial paper holdings while boosting its holdings of US Treasury notes. The firm also revealed that it currently owns foreign government debt.
Although the majority of the assets in the report are stable, “corporate bonds, funds, and precious metals” and “other investments (including digital tokens)” account for roughly 11% of the total.
Overall, the report shows that the company’s reserve surpasses the amount needed to redeem the digital tokens it has issued.
Tether’s account, however, reveals it has $162 million more in reserves than its tokens, according to Patrick McKenzie, a fintech analyst. However, due to the bearish trend of the crypto market, some of its investments, such as those in the Celsius network, are doing poorly.
“Tether has maintained its stability through multiple black swan events and highly volatile market conditions and, even in its darkest days, Tether has never once failed to honour a redemption request from any of its verified customers,” Tether’s chief technology officer, Paolo Ardoino stated.
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