Tether, the world’s largest stablecoin, has regained its $1 par value after a sudden drop to $0.95 and a $3 billion decline in turnover in just one day.
Today, the stablecoin is trading at a par value of $1, demonstrating to investors that their fears of a chain reaction in the cryptocurrency market are unfounded – the only victim was unsecured TerraUSD, the value of which was supported by the Luna cryptocurrency issuance algorithm, which fell from $85 to $0.005 in a week. Tether, in turn, is backed by cash and short-term bonds in an amount equivalent to the issued tokens.
Stablecoins are viewed by crypto investors as an analogue of bank assets protected from volatility – a significant part of bitcoin trading is done in Tether. Now the turnover of the cryptocurrency is $79.5 billion, and a day ago this figure was $82.9 billion. Thus, the company servicing the project redeemed assets worth more than $3 billion in just a day. Tether CTO Paolo Ardoino said that all requests were processed as quickly as possible through the company’s banking channels. The amounts in the applications ranged from $100,000 to $600 million.
Investors have long doubted Tether’s ability to provide cash for the tokens, and with the involvement of the New York State Attorney General, it was found that the company’s reserve contained commercial paper – short-term unsecured debt. The company has promised to reduce their share, and currently 52% of the funds are in short-term US Treasury bills – by the next financial report on reserves, this number will increase.
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