Highlights
- Tether Ltd. plans to issue two more stable coins
- They are aimed at a global audience
- One of the reasons to issue more coins is to mitigate risks
Tether Ltd., the sister firm of renowned exchange Bitfinex, unveiled plans to issue two more stable coins. Other than its flagship USDT, a US dollar-backed stable coin, Tether wants to issue a stable coin backed by a basket of Commodities including Gold, Crude Oil and Rubbers among others, and another backed by the Chinese Yuan.
Tether’s USDT is the leading fiat-pegged digital currency in the crypto market, boasting a supply over $4 billion. The token was adopted by most of the crypto exchanges to circumvent the regulatory needs of offering fiat-based services while providing a similar experience to traders due to the stable nature of the cryptocurrency. Since then, there have been several allegations against Tether and Bitfinex about the validity of the $4 Billion reserves claimed by Tether.
Will it Revive Tether or Make More Holes in the Sinking Ship?
In spite of allegations pouring in from all side, Tether’s move to issue two more stable coins came as a shock to the entire community. During the initial issuance of USDT, Tether claimed that every USDT issued will be backed by a physical US dollar with their custodial bank, in a 1:1 ratio. Several independent researchers and motivated professionals have since proved multiple times about the illegitimacy of the claim.
Some of the discrepancies recorded include a $650 million loan to its sister concern Bitfinex with newly created supply; issuing $250 million USDT in a week during the bear market which remains unaccounted; allowing Bitfinex to cover funds shortfall and so on.
Since then, the Tether team has managed to jump over all hurdles by clearing the case against them by the NYAG, reporting repayment from Bitfinex and providing accounts for 100% funds. But suspicion still
Another Round of Complications Await
After successfully clearing their name, the Tether has started to focus their attention on the future. In an attempt to mitigate the risks associated with keeping large sums of money on with single entity, Tether will release a stable coin backed by a basket of commodities such as gold, crude oil and rubber, stated Zhao Dong in an interview. It will also issue a Chinese Yuan-backed stable coin dubbed CNHT, that will cater to the Chinese audience and help more people gain crypto exposure.
“CNHT will not interfere with PBOC capital control policy because CNH is different than CNY, as it’s already an offshore product. On the contrary, CNHT will help China to expand the adoption of CNH for international settlements”
It remains to be seen how the government of China will react to the proposed stable coin as China themselves gear up to issue their State-backed digital currency early next year. It can turn out to bring serious complication for Tether.
Resources:
Tether Ltd. | Whitepaper | Allegations Against Tether |
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