Breaking: Mystery Around Stablecoin Tether (USDT) Reserves Solved?
Tether Reserves: The mystery behind the largest stablecoin appears to be slowly uncovering with news of companies supporting its reserves. According to reports, a Wall Street based firm is the backbone behind maintaining Tether’s reserves. This is of huge importance as concerns were raised around lack of transparency about the stablecoin’s proof of reserves. Although the company behind the stablecoin try to make changes in terms of auditing and the assets it holds to back the cryptocurrency, questions remained about lack of transparency.
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Tether Bond Portfolio
According to a Wall Street Journal report, Cantor Fitzgerald, a Wall Street financial services firm, oversees Tether’s i$39 billion bond portfolio. Interestingly, Cantor Fitzgerald itself has had some close links to the cryptocurrency market for many years now. The company had in 2017 announced it would launch Bitcoin (BTC) linked futures contracts. Another company, BGC Partners, an affiliate of Cantor, appears to be in preparation to launch its own crypto exchange in early 2023.
The mystery revelation about Tether’s reserves comes at a time when questions are being raised about transparency in the crypto market. In a latest, the U.S. Securities and Exchange Commission (SEC) charged crypto exchange Kraken for offering unregulated securities in the form of crypto staking. Although staking is different from the way stablecoin’s maintain equilibrium with its total market cap, the risky nature of these assets raises doubts about its stability.
In May 2022, algorithmic stablecoin TerraUSD (UST) collapsed leading to a catastrophic crypto crash that continued to affect the market for several months. Following this, voices were raised about the lack of transparency around stablecoin reserves.
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With a market cap of $68.20 billion, Tether (USDT) is the most traded cryptocurrency thanks to the stablecoin’s interchangeability with the value of 1 US Dollar.
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