Tether executive confirms dollar reserves remain intact
Tether (USDT) remains fully covered by US dollar reserves a spokesman for the operator of the cryptocurrency told OpenLedger on Monday night, countering rumours that the stablecoin had lost its dollar peg.
While the company blamed short-term volatility for the stablecoin’s recent lack of stability, its one-for-one pricing against the dollar has usually returned to $1 following fluctuations.
But in the last couple of trading sessions investors have become concerned by the digital token’s inability to return to the $1 level and the price remained at 95 cents on Tuesday morning.
Tether’s chief compliance officer Leonardo Real told OpenLedger that reports of its delisting on some exchanges – including Binance – were incorrect, and Binance also confirmed this on Monday, even though it had temporarily suspended tether withdrawals due to “network congestion”.
Real told OpenLedger: “Tether is the leading provider of tokenized fiat currencies and is listed on many exchanges worldwide.
“We would like to reiterate that although markets have shown temporary fluctuations in price, all USDT in circulation are sufficiently backed by US dollars and that assets have always exceeded liabilities.”
Tether’s price against the dollar fell as low as 87.18 cents on Monday, as the rumours spread – some going as far as suggesting a pump and dump scam.
On Tuesday, however, after Binance confirmed its continued coverage of the digital currency, the price recovered some ground, regaining more than 7% back to 95 cents.
Tether is an important facet of the cryptocurrency markets. After bitcoin it is the most liquid of the cryptocurrencies, accounting for 24-trading volumes of around $4.6bn, compared with bitcoin’s $5.9bn.
Audit confirms peg
A loss of its dollar peg would, inevitably, cause the market to lose confidence in the digital currency and, indeed, that is what appeared to be happening during the recent sell off.
Tether’s Real offered further relief for those concerned about its dollar peg: “In June 2018, a report from Freeh Sporkin & Sullivan, LLP (FSS), based on a random date balance inspection and a full review of relevant documentation of bank accounts, confirmed that all tethers in circulation as of that date were indeed fully backed by USD reserves.”