Tether – one of the biggest cryptocurrency stablecoins has minted another $2 billion USDT on the TRON blockchain.
A stablecoin is a new class of cryptocurrencies that price is pegged to an asset like the USD. For example, 1 USDT would equal 1 USD approximately.
What This Could Mean For USDT
Despite certain voices who have criticized Tether for a long time, asking whether USDT really is tied to the US Dollar or not – and how this tethering is actually ensured – Tether representatives and associates have gone on record in the past stating that every Tether token minted is actually backed by a reserve.
The above video is a podcast where Gregory Pepin – the CEO of Deltec bank – talks about the reserves backing USDT. Deltec is the Bahamas-based bank run by Tether Ltd., where their cash reserves are stored.
“We cannot take domestic customers and we cannot hold domestic Bahamian dollars. So that report is actually not relevant. And actually, if [the post’s author] took a little effort to go and dig a bit about the size of the Bahamian market of banking, [that person] would have found out that the entire mass of banks have around $200 billion in assets, I believe. And we are a part of that.”
Although any financial information, whether to do with crypto, fiat or both should be taken with a grain of salt, it’s worth noting that USDT is still one of the largest cryptocurrencies by market cap – so it’s quite possible that this minting is simply the result of new investors, or simply new funds that Tether Ltd. is putting to use. In addition, 2020 has seen the US Dollar ride quite a wave of inflation.
Overall, the minting of $2 billion worth of USDT should not be a cause for worry – but as always, be sure to perform careful research before making any investment.
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