Tether is facing the same question again and again as its competitors are ticking all the right boxes what investors want. In less than 24 hours since Circle released its third independent audit report for its USDC, people have already started questioning Tether again to come out clean on its dollar balances that are currently backing Tether (USDT) in circulation.
Tether Losing Market Share, conspiracies finally taking a toll onTether
Tether was one of the first stablecoins that provided shelter to investors against the volatility of crypto markets. But as the coin became popular, the question started being raised on the coin’s credibility and its complete backing by the US dollar. The stablecoin was also connected to it being used for manipulation and rigging the Bitcoin prices, which skyrocketed to USD 20000, in December 2017. It’s been over a year since; the coin has not been able to come up clean on allegations.
Recently, Circle, the company behind USDC released their third report on the USDC stablecoin which was signed by the leading auditor firm Grant Thornton which stated that Circle has sufficient capital to back each individual token on a 1:1 basis. According to the report that published on the 16th January, 251,211,148 USDC tokens were issued and outstanding on 31 December 2018, while the company holds 251,211,209 dollars in deposits, an excess of 61-dollar reserves.
This report leads to question being fired back at Tether asking to come transparent.
Weiss Rating, a leading cryptocurrency rating, and research agency tweeted the following,
#Crypto finance startup Circle’s USDC stablecoin was fully backed with fiat reserves at the close of 2018, Goldman Sachs-backed Circle currently has a total of 353,309,381 USDC #tokens on the markets. Will Tether ever do an audit?#Cryptocurrencies #BTC #XRP #Bitcoin
— Weiss Ratings (@WeissRatings) January 17, 2019
Twitter users have always been asking similar questions to Tether
This is no bueno for #USDT #tether. Fortunately, #USDC is fully backed by the #dollar and can be verified. You may want to switch to #usdcoin which can be found on #poloniex #binance… https://t.co/dD1ymBAKoT
— MasterCrypto5000 (@MCrypto5000) December 27, 2018
— SmartCryptoGems (@SmartCryptoGems) December 20, 2018
Since Inception, Tether has abstained from releasing an independent report that shows its US dollar reserves which are the underlying asset for its stablecoin. And now with competition coming in from other stablecoins, who have been fairly transparent on the underlying USD reserves, life is slowly becoming difficult for Tether. Recent research by Diar showed Tether’s dominance over the stablecoin market plummet by 16% – the equivalent of nearly $1.1Bn on the back of transparency and banking woes. The research showed Tether dominance, plummeting from 99% in January 2018 to 69% in January 2019.
While Tether problems are mounting for it to come clean seems to be the only solution. It’s the trust of the investors and people that are driving the whole cryptocurrency industry and slowly the non-transparent coins will have no space in the cryptoshpere.
Will Tether come out clean and release an independent audit report? Do let us know your views on the same
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.