Concerns around Tether are not new. Are they unfounded attacks or reasonable accusations? Let’s talk Tether.
Not all questions are necessarily hateful attacks. Not all concerns are always campaigns to spread FUD. For the press, there can be no sacred cows. Namely, writing about Tether is valid and necessary. If Tether gets offended by critical items, it’s best for them to eat lemon.
Tether is the stablecoin with the largest crypto market capitalization. We are talking about a little more than 67 billion dollars. Which implies that there are many mourners in the Tether case. Many of us are your creditors for having bought the token. Can’t Tether users have questions, doubts or demands?
The Wall Street Journal, one of the most important newspapers in the world, published an investigative journalistic article, last Monday, August 27, about Tether. In short, it highlights the fine line that separates assets from liabilities in the Tether ledger.
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“A 0.3% drop in assets could make Tether technically insolvent, a development skeptics warn could reduce investor confidence and spur a surge in redemptions.”
“At the time of this writing, Tether has assets worth $67.74 billion and liabilities worth $67.54 billion, making a difference of just $191 million, according to the Tether website.”
According to the Tether website: “The article seeks to discredit the work that Tether has done in transparent and honest communication to the public.”
“Attack Tether reserves […] further highlights an agenda of the release to single out Tether and damage its reputation,” the USDT issuer said.
In my opinion, Tether’s reaction to the article is more concerning than the article itself. The problem is that we already know that movie. How did Celsius respond to similar accusations? How did the people of Terra/Luna respond to their critics? “clickbait”. “FUD”. “fakenews”. It is no secret to anyone that Tether’s reputation is not the best. And that’s not The Wall Street Journal’s fault. In this ecosystem, Tether, due to its size, age and penetration, is considered a necessary evil. But we cannot say that it is the most transparent project. Y the doubts raised by Tether are not the product of a conspiracy. In fact, they are the result of a rather opaque, contradictory and improvised management.
The slots won by USD Circle, Tether’s most transparent competition, show that not everyone is satisfied with Tether. Faced with the situation, victimization is the saddest and most pathetic response. The fault is not with the press. A good start for Tether is to take responsibility and take matters into your own hands with amends and objections. Obviously nobody wants to create a panic around Tether. Because a panic, by causing a mass flight, can become a self-fulfilling prophecy. However, that is not to say that complicit silence is the most sensible course of action. If The Wall Street Journal’s investigation is flawed, Tether should set the record straight by showing the evidence.
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Exchanges have been in league with Tether for a long time. I assume it has been a matter of necessity and convenience. Now, the exchanges work with Tether. And that works as a form of legitimacy in the eyes of many users. However, in case of a crash, the exchanges will surely wash their hands and not take any kind of responsibility. The solution applied by many individuals has been to use Tether only for fast transactions. In other words, Tether is used out of necessity or convenience, but Tether is avoided for a long time. In the minds of many, Tether is a hot potato that can explode at any moment.
The issue of “technical insolvency” should not come as a big surprise to us, because Tether has recognized in the past that 1:1 parity has not always been respected. Rather, that 0.3% is actually quite generous. Because the difference between assets and liabilities has been much larger in the past. And that is not according to third parties. The company itself has recognized this at the time. In other words, Tether has already functioned as an unregulated bank that prints money out of thin air by not exactly following an exact parity with the dollar.
In other words, that “technical insolvency” with a fall of 0.3% mentioned by the WSJ is not, deep down, a particularly special reason for alarm. Why? Well, because that danger has always been there latent for a long time and is already known by almost everyone. But, Due to some mysterious accounting magic, Tether has managed to survive all these years. In other words, controversy is not new to them. Tether has always raised doubts. And that systemic risk has always been breathing down our necks.
Nobody wants Tether to collapse. But we all know that Tether needs to change, and it needs to change fast. it is known that she is in the crosshairs of the authorities. Regulators will surely start with stablecoins. And Tether, without a doubt, will be the first on the list. The pressure is coming from everywhere. Then, Tether will have no choice but to develop a much thicker skin. Because the scrutiny will be increasing.
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All love is eternal, until it ends. Por now, Tether has managed to keep the ship afloat. Luck has been on your side for a long time. But that doesn’t mean they’ll never have a bad day. And sometimes that’s what it takes for Troy to burn.
Tether is flawed. Here there is no doubt. If the flaws are not in your finances, then they are in your communication. How is it possible that a company arouses so many doubts so often?
Now, if Tether does not want to change, we must change. In other words, the user now has alternatives. There are more transparent options available to us. In fact, it is not a bad idea to reward the competition when it inspires more confidence than the old option. On the other hand, exchanges must play an active role here. Something like this: Without independent auditing, you are not on the list. As simple as that. I know it’s not easy. Because Tether is a titan. But now is the time to do the right thing. The time to turn a blind eye has passed.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
It may interest you:
- What does Anthony Scaramucci (really) say about Bitcoin?
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