Updated March 5th, 2024 at 09:21 IST

Tether surpasses $100 billion in circulation of Stablecoin tokens

Tether issues a stablecoin called USDT, which is specifically designed to maintain a constant value of $1.

Reported by: Business Desk
Tether | Image:Unsplash
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Tether surpasses $100 billion: Tether, the cryptocurrency company, announced on its website that the number of dollar-pegged stablecoins it has issued has crossed the $100 billion mark.

Tether issues a stablecoin called USDT, which is specifically designed to maintain a constant value of $1. 

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It serves as a widely accepted method for transferring money within the cryptocurrency realm without being susceptible to price fluctuations seen in other cryptocurrencies like bitcoin and ether.

The company ensures the stability of its dollar-pegged tether token by maintaining dollar-based reserves that match the volume of cryptocurrencies it has generated.

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Despite being pegged at $1, the tether token has recently traded as high as $1.0020, reflecting heightened demand from investors anticipating a surge in bitcoin and utilizing tether as a medium to exchange fiat currencies for cryptocurrencies.

Justin D'Anethan, head of Asia-Pacific business development at digital assets market maker Keyrock, commented, "Traders were willing to pay a premium on tether in order to get their orders through." 

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He noted that despite facing skepticism regarding their legitimacy, tether has endured various volatility events and remains a dominant denomination in cryptocurrency pairs.

CoinMarketCap data revealed that approximately $124 billion worth of tether tokens had been exchanged over the past 24 hours.

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US regulators have cautioned banks about the potential for rapid outflows of stablecoin reserves, particularly if holders decide to exchange such tokens back into traditional currency.

As part of a 2021 settlement with the New York Attorney General's office, Tether agreed to provide quarterly reports on its reserves for two years. 

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According to its latest report at the end of 2023, Tether's reserves consisted of $63 billion in US Treasuries, $3.5 billion in precious metals, $2.8 billion in bitcoin, $3.8 billion in "other investments," and $4.8 billion in “secured loans.”

(With Reuters Inputs)

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Published March 5th, 2024 at 09:04 IST