Still Ticking: Tether Prints Money Out of Thin Air
- A tweet from Mr. Whale indicates that 1,000,000,000 USDT were minted by Tether and sent to an address.
- While there has been a buzz about how this move by Tether will bolster the falling values of the global cryptocurrency market capitalization, another angle posits that Tether is printing money out of thin air.
- Tether has been plagued by legal issues for most of its history with the latest being the case with the New York Attorney General’s office.
- At the moment, the stablecoin is the third-largest cryptocurrency with a market capitalization of over $60 billion.
Tether, the world’s largest stablecoin with a market capitalization of over $60 billion has just printed 1,000,000,000 USDT. To the wider financial community, it may appear that this money has been minted out of thin air.
A Twitter account known as Mr. Whale made a tweet on the 24th of May, 2021 indicating the parties involved and the value of the transaction minted in USDT.
This comes at a time when Tether has been plagued by legal issues questioning whether the asset is truly backed by the dollar or not. Demand for the stable coin has reached an all-time high as shown by the recent spike in market value for Tether.
From Thin Air?
After the information trickled to the mainstream media, it triggered uproar from financial enthusiasts and sparked claims that Tether is merely printing money from thin air.
Speculation abounds concerning the recent move by Tether to mint 1,000,000,000 USTD, some claiming it is a ploy to salvage the dwindling values of as Bitcoin climbed by as much as 3% after the move.
As a stablecoin, Tether is pegged at a ratio of 1:1 with the US dollar and is expected to be backed by funds to match their distribution. However, a wave of legal troubles has revealed that Tether’s claim of being 100% backed in cash was false and an investigation revealed that only 3.87% is backed in cash.
Tether revealed that a bulk of its reserves are in commercial paper, fiduciary deposits, loans, and corporate bonds, etc. These legal travails cast a large shadow of doubt on the stablecoin, painting the picture that Tether is printing cash from thin air although Tether claims that the asset is fully backed by reserves.
On the Flipside
- Tether’s success could be a blueprint for the development of CBDCs and the future of banking in the near future, says Tether’s CTO, Paolo Ardoino.
- CBDCs are already popular among central banks, with the likes of China, Bahamas, Jamaica, Lithuania, and Russia already working on their respective projects
- Despite the legal hurdles, Paolo Ardoino describes 2021 as a “wonderful year so far for Tether.”
Tether’s Mind-Boggling Figures
The move by Tether to print a billion USDT firmly raises the market capitalization to over $60 billion which places it as the third-largest cryptocurrency by market capitalization above Binance Coin and below .
Tether is one of the most liquid cryptocurrencies in existence and has, in the last 24 hours, experienced a daily volume of $146.63 billion, compared to Bitcoin and Ethereum with daily volumes of $60.4 billion and $51.91 billion respectively.
Tether holds the record as the fastest company in history to reach a valuation of $50 billion after it achieved the feat in less than 2 years. In comparison, it took Amazon (NASDAQ:) and Tesla (NASDAQ:) 16 years to achieve the same valuation of 50 billion.
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