In order to reassure users of its flagship USDT stablecoin, the company Tether wanted to communicate the stability of the latter, as well as possible links with FTX or Alameda Research.
Tether clarifies its position towards FTX
Although it is still too early to assess the consequences the FTX case will have, many ecosystem players have communicated their situation. This is particularly the case with Tether, the issuer of USDT, that he wanted to reassure on the anchor to the dollar the latter and the company’s links with Sam Bankman-Fried (SBF) companies.
In the first place, Tether wanted to remain optimistic about the long-term potential of our ecosystembut he was also very clear about his possible exposure to FTX and Alameda Research:
“Regardless of the volatility this incident may have triggered, cryptocurrency and blockchain technology are driving a revolution in financial inclusion, transforming a broken model that doesn’t work in the modern world. Secondly, we would like to confirm that at this time Tether has absolutely no merit towards FTX or Alameda Research. Tether is absolutely not exposed to Alameda Research or FTX. “
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USDT’s dollar peg is safe, says Tether
For a time, part of the ecosystem may have had doubts about the stability of Tether’s USDT. And for good reason, on the last day, it could have traded for 96 cents, as CoinGecko data shows:
USDT price on CoinGecko
In reality, Tether points to a problem with the API CoinGecko dealt with on Wednesday morning. A problem that has now been solved.
Of course, while it may seem counterintuitive, the price of any stablecoin can go up or down to some degree. This is observed in times of high volatilityas the USDT issuer explains:
“During times of market volatility, the publicly traded price of USDT can fluctuate. This happens because there are more liquidity demands than there are in orders from this platform and it has nothing to do with Tether’s ability to hold its peg, nor with the value or composition of its reserves. “
In fact, even in these situations, Tether is still able to trade its stablecoins on a one-to-one ratio, thanks to its reservesand the situation usually clears up within a few hours, as volatility decreases.
However, even with a regulated company like Tether, it is worth considering the scenario of a possible black swan, as the events with FTX reminded us. For this, it can be important to diversify its stablecoin reserves, so as not to put all of its eggs in one basket.
👉 Also in the news – France: are cryptocurrency companies affected by the fall of FTX?
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