Tether USDT, just like bitcoin, rules the world of stablecoins. However, Tether is arguably the most controversial cryptocurrency in the industry.
Although the idea of a “stablecoin” in the volatile crypto market is applaudable, the dollar-pegged coin has received a lot of criticisms and accusation of price manipulation.
A group of researchers at the University of Texas released a study in June 2018, concluding that the Tether USDT was responsible for up to 50% of bitcoin price manipulation which led to the crypto boom in late 2017.
Tether USDT Not 100% backed by USD
Tether, right from its early days, claimed that it is fully backed by the US dollar. What this means is that if the stablecoin in circulation is 3,000,000 USDT, then the company should have an equivalent of $3,000,000 in a real bank account.
However, it seems Tether does not have enough money to back the stablecoin supply as they claim. The owners of the USDT are supposed to issue regular audits of their bank account to prove that the US dollar fully backs the amount of USDT they have. But they failed to provide such audit report or evidence, even though they still claim, till today, that they have 100% backing.
Rise of the Stablecoins
Although Tether remains the most popular stablecoin and the second largest cryptocurrency in the world according to trading volumes in the last 24 hours, more and more sophisticated fiat-pegged tokens are on the rise.
With advanced features, evidence that they are truly backed by fiat, and regulatory clarity, some of these coins may likely dethrone Tether.
In December last year, it was reported that Facebook is also planning to create its own stablecoin for its Whatsapp platform and will be tested with over 200 million Indian users.
Coinfomania reported yesterday that Japan would welcome its first yen-pegged stablecoin “JPY-Token.” Crypto Garage, the firm behind the project, received approval from the Japanese regulators to test run the idea. The stablecoin could be launch in early 2020 if a successful trial is conducted this year.
Reports today also revealed that crypto exchange Huobi Global is also gunning for a stablecoin this year. A press release from the exchange shows that creating a dollar-backed cryptocurrency is part of their 2019 road map.
This will be a great project for Huobi, especially since the exchange recently entered the US crypto market through the rebranding of HBUS barely two weeks ago.
With more ambitious stablecoins coming with better offers and security from leading cryptocurrency exchanges and companies, we could see controversial Tether lose its relevance this year