Tether finally proves it’s backed by real USD.
Tether – a cryptocurrency that had experienced many allegations of price manipulation and questionable relationship with BitFinex has finally released an announcement that it had found a new banking partner – Bahamas-based Deltec Bank & Trust.
“Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.”
However, throughout its history Tether has failed to show any audits to back this statement up. Other accusations came from the fact that From January 2017 to September 2018, the number of tethers skyrocketed from about $10 million to about $2.8 billion. Which led to questions about the relationship with Bitfinex and Tether minting USDT out of nothing.
More pressure fell on Tether when on 12thOcober USDT price plunged breaking its dollar parity, dropping the exchange rate briefly as low as $0.85 on the Kraken exchange. Following this event, a wallet address related to BitFinex has sent 680 million USDT to an address known as the “Tether treasury”. As a result of these transfers, the supply of tethers in circulation has dropped by from around $2.8 billion to approximately $2 billion and now still continues to go down. Now many of these tokens, in addition to having been taken out of circulation, have been “burned” or destroyed by the company. Tether denied that it is intentionally scaling back supply and getting out of the stablecoin business, and buying back its own tokens at a profit. Still, Tether failed to show any satisfactory explanation regarding these events.
Today, Tether could finally back up its USD collateral showing a letter from Deltec Bank & Trust confirming the portfolio cash value of $1,831,322,828. Tether explained Deltec agreed to bank it “after their due diligence review of our company. This included, notably, an analysis of our compliance processes, policies, and procedures; a full background check of the shareholders, ultimate beneficiaries and officers of our company; and assessments of our ability to maintain the USD-peg at any moment and our treasury management policies.”
Comparing this figure with the current circulating supply$1,776,421,736, we can see that Tether (USDT) despite all accusations is backed by actual US Dollars.
This is really good news that can let traders and investors loosen up a bit, especially amidst the uncertainty of the whole market, USDT price storms and past rumors of Binance delisting the stablecoin.