In order to reassure users of its flagship stablecoin USDT, the company Tether wanted to communicate about the stability of the latter, as well as possible links with FTX or Alameda Research.
Tether clarifies its position vis-à-vis FTX
While it is still too early to assess the consequences that the FTX case will have, many players in the ecosystem have communicated on their own situation. This is particularly the case with Tether, the issuer of USDT, who wanted to reassure on the anchor to the dollar of the latter and of the company’s links with the companies of Sam Bankman-Fried (SBF).
Firstly, Tether has been keen to remain optimistic about the long-term potential of our ecosystembut was also very clear about his possible exposure to FTX and Alameda Research:
“Regardless of the volatility this incident may have triggered, cryptocurrency and blockchain technology are driving a revolution in financial inclusion, transforming a broken model that doesn’t work in the modern world. Second, we would like to confirm that at this time Tether has absolutely no credit to FTX or Alameda Research. Tether is absolutely not exposed to Alameda Research or FTX. »
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USDT’s dollar peg is safe, says Tether
For a time, part of the ecosystem may have had doubts about the stability of Tether’s USDT. And for good reason, during the last day, it could have been exchanged for 96 cents, as evidenced by data from CoinGecko:
USDT price on CoinGecko
In reality, Tether points to an API issue which CoinGecko had to deal with on Wednesday morning. A problem that has now been solved.
Of course, while it may seem counterintuitive, the price of any stablecoin can move up or down to some extent. This is observed in times of high volatilityas the USDT issuer explains:
“During periods of market volatility, the price of USDT that is listed on exchanges may fluctuate. This is happening because there are more demands for liquidity than there are in that platform’s order books and has nothing to do with Tether’s ability to maintain its peg, nor the value or the composition of its reserves. »
Indeed, even in these situations, Tether is still able to trade its stablecoins at a one-to-one ratio, thanks to its reservesand the situation usually resolves itself within a few hours, as the volatility decreases.
However, even with a regulated company like Tether, it is wise to consider the scenario of a possible black swan, as the events with FTX reminded us. For this, it may be relevant to diversify its reserves of stablecoins, so as not to place all its eggs in the same basket.
👉 Also in the news – France: Are crypto companies affected by the fall of FTX?
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Source: Tether
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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