The world’s largest stablecoin issuer Tether has published the results of the attestation of its assets. Thus, the company provided evidence that it owns $ 35 billion in reserves, which means that almost every USDT token is backed by a dollar at a ratio of 1 to 1.
This is very important news for the crypto market and its critics, who have long stated that problems with USDT collateral could lead to a serious collapse of all digital assets, as Tether is now the most popular stablecoin with a huge capitalization. Let’s talk about the situation in more detail.
Recall that stablecoins are the most important component of the cryptocurrency industry. Because their value is pegged to the dollar or other fiat currencies, they allow traders and investors to wait out the stages of a market crash without losing the actual value of the portfolio. That is, conditionally, the owners of bitcoins could sell them after the first reaching the rate of 60 thousand dollars, and then buy the same asset for the same amount of 54 thousand dollars – this rate was observed only three days after the record.
Thus, the investor would not only secure his income, but also acquire the asset at a lower price, earning a certain amount. However, in practice, it is rather difficult to perform such an operation. Still, it is almost impossible to predict what is happening on the market.
We checked the actual data: now the capitalization of stablecoins is $ 62.39 billion.
Market capitalization of stablecoins
The leader among them is indeed USDT from Tether – its market share is 68.31 percent. At the same time, the closest competitor USDC has 17.58 percent of the total capitalization.
Share of stablecoins in the cryptocurrency market
Is the USDT cryptocurrency backed up?
The asset qualification document was created by Moore Cayman, an accounting firm based in the Cayman Islands. According to her, at the time of February 28, 2021, Tether had $ 35.28 billion in assets against $ 35.15 billion in total liabilities. Overall, this is the first third-party review of Tether’s position to show that its reserves are in line with the amount of USDT in circulation since 2018. This is also the first certification from a real-world accounting firm since September 2017. Thus, the audit carried out should answer all the questions of skeptics regarding the company’s business.
Here is a quote from Tether Holdings’ statement on the matter. The replica is provided by Coindesk.
Tether has always been fully backed by real currency, and the conclusion we presented today confirms this once again. We are a leader in the growing cryptocurrency industry and continue to strive to be one of the most transparent stablecoin issuers.
Trading on the exchange is now less risky – at least you can be confident in Tether
True, there are some nuances in all this. Attestation is not the same as audit. The latter is intended to search for potential risks, while attestation only evaluates the accuracy of the data verified by the auditor.
As the largest stablecoin, USDT plays an important role in the $ 1.8 trillion crypto market. Since the coin typically trades at or near $ 1, USDT allows traders to quickly move a similar replacement for regular currency between exchanges. This makes it possible to use the possibilities of arbitrage – that is, earnings on the difference in the rates of the same asset on different sites – and the exchange of other digital assets.
Top ten most popular stablecoins
Tether plans to publish the results of another attestation after March, and then conduct quarterly attestations. By the way, this information is not related to the disclosure of evidence that Tether intends to provide to the office of the Attorney General of New York (NYAG). This was stated by Stuart Högner, general counsel of Tether and a subsidiary of Bitfinex.
We are doing this on our own to honor Tether’s commitment to greater transparency. While this is not related to the publication of the opinion, the settlement is another example of our commitment to transparency.
Tether, Bitfinex and NYAG have completed a nearly two-year legal investigation into whether Bitfinex covered about a billion dollars in client funds loss using Tether’s reserves. Part of the settlement entails the filing of quarterly reports by Tether detailing the company’s reserves for the next two years.
We believe this news is positive for the cryptocurrency industry. While attestation does not mean audit, Tether’s commitment to transparency is commendable anyway. Obviously, after the accusations over the past few years, the company will have to work to improve its own reputation. And that is what they are doing now.