“Revolver” website has an extensive article on Nov. 19 on the cryptocurrency, Tether, which is apparently poised to move into the vacuum created by the collapse of FTX, posing the question as to what exactly is propping up Tether. Tether was started up in 2014, and is what is called a “stablecoin,” being tied to a real currency 1:1, it doesn’t fluctuate in value. Tether is tied to the U.S. dollar, and is referred to as “USDT"; supposedly there’s one real dollar backing each Tether dollar issued. The values of most cryptocurrencies vary wildly, so this is supposedly a “safer” bet; being more stable, Tether is now the world’s third largest cryptocurrency.
Revolver points out: “These USD stablecoins are used on cryptocurrency exchanges to conduct on-the-blockchain trades in lieu of using actual U.S. dollars. Without stablecoins like Tether, the current crypto ecosystem simply would not exist. There are multiple USD stablecoins, but Tether is by far the most popular. According to coinmarketcap.com, Tether has the third highest market cap of any cryptocurrency at $66 billion, trailing only Bitcoin and Ethereum. Today, fully half of all bitcoin trades globally are executed using Tether.”
And, although its website touts that it believes in “transparency,” Tether has never actually been audited to demonstrate whether it holds reserves sufficient to back the tokens issued.
