Tether Mints New Coins

| Publish date: 05/22/2018
Share

Accoding to the latest news reports, Tether has minted another $250 billion worth of its USTD tokens, taking the total supply of the tokens to 2.5 billion. And this has re-ignited the controversy surrounding the stable coin.

Controversy around Tether

Tether has claimed that these USTD tokens trade at 1:1 to the US Dollar. However, Tether cut ties with the established audit company Friedman LLP just prior to the initiation of an official audit of the crypto, meaning this claim has never been officially verified or proven. This has led to people questioning the very validity of the cryptocurrency as well as its assertion about its backing by the US Dollar.

Since there is now no way to verify whether Tether’s claim about all of its 2.5 billion tokens being backed by US Dollars is true, it leaves the crypto open to suspicion and doubt.

Another thing that Tether is being accused of is price manipulation in the cryptocurrency industry. According to anonymous blogger Bitfinex’ed, every time there is a new release of Tether tokens, the price of Bitcoin and Ether jump up by approximately $120 and $10 respectively within an hour of the new tokens being issued. This is proof that there is some form of manipulation in the prices, which is hurting the cryptocurrency industry as a whole – especially in the short to medium term.

Tether’s sister company, the cryptocurrency exchange Bitfinex, is threatening to take legal action against critics like Bitfinex’ed for creating negative sentiment against the stable coin.

Tether’s Monopoly as a Stable Coin

A stable coin is a crypto which has been pegged to another stable asset, such as the US Dollar in Tether’s case, or even gold. These cryptocurrencies are global in nature, but are not linked to any central bank and are considered to have low volatility compared to other cryptocurrencies.

Tether is a crypto that is 100% backed by US Dollars held in a reserve account. Tether also has a near complete monopoly of the stable coin market. However, with 2.5 billion tokens now in circulation, and the fact that the company refused to be audited, skepticism is very strong about whether the company actually has $2.5 billion US Dollars in reserve to back its USTD token.

The good news is that Tether will no longer be able to monopolize the stable coin market. Goldman Sachs’ backed Circle, TrueUSD and Basis have also begun to develop their own stable coins and will soon introduce them to the market.

Once that happens, Tether will need to prove the veracity of its claims if it expects to stay competitive in the stable coin market.

Share

Related Posts

New Head of FSS More Positive about...
According to the latest news reports, South Korea has…
VC Spectra’s Glorious Surge: Can Cardano &...
VC Spectra (SPCT) raised $2.4 million in its private/seed…
Epic Clash of Titans: TMS Network (TMSN)...
In a spectacular showdown, TMS Network (TMSN) emerges as…

Leave a Comment