Chainalysis, a blockchain analysis company, has announced the formal partnership between it and Tether. The firm will be able to track the tokens cycle which will ensure real-time anti-money laundering (AML) compliance solution. This has been largely a demonstration of trust from Tether to its users.
Chainalysis Know Your Transaction (KYT)
Know Your Transaction (KYT) is a solution that can track suspicious activity in a blockchain. The solution has already been in use on Tether since April. Today, however, marks the global rollout of the product. This will enable the project to monitor all transactions on the blockchain and ensure that suspicious activity is tracked in real-time.
Paolo Ardoino, Chief Technology Officer, Tether., noted this about the partnership:
“Working with Chainalysis has allowed us to enhance our AML processes for all transactions involving the Tether token,”
He further noted that given the stablecoin was one of the largest cryptocurrencies, they had the responsibility to ensure transparency which is now possible through automated compliance solutions. Notably, Tether is the cryptocurrency that posts the highest daily trading volume surpassing even Bitcoin, the largest cryptocurrency.
This is because Tether is a stablecoin and it has its value pegged on the USD. In times of volatility, investors seek it to avoid huge losses while easily buying back cryptocurrencies when prices are stable.
Jonathan Levin, Chief Strategy Officer, Chainalysis, applauded the initiative, stating:
“By putting proper AML transaction monitoring in place, Tether is demonstrating its commitment to transparency and regulatory compliance, further building trust among its growing user base.”
Tether Needs To Build Trust
The stablecoin has over the last couple of months come under fire mainly because of a lack of transparency. Over and above being linked with Bitcoin price manipulation back in 2017, there have been accusations that the stablecoin does not have its coins fully backed in its reserves by Fiat. However, the project has dismissed both accusations.
This has nevertheless led to its popularity declining over the last two years. It has also seen the number of competing stablecoins rise, most recently Gemini’s stablecoin, GUSD. With the latest initiative, the project has demonstrated that it is building trust with clients. This will go a long way to its success and see its user base grow.