Tether to Announce Real-Time USDT Reserves in 2024
Tether's new CEO Paolo Ardoino plans to announce real-time USDT reserve data in 2024 to enhance transparency for the stablecoin.
Tether to Announce Real-Time USDT Reserves in 2024
In an exclusive interview, Bloomberg highlighted Tether's lack of transparency across various aspects, including the collateralization mechanism for the USDT stablecoin, prompting CEO Paolo Ardoino to announce plans to publish real-time reserve data for USDT in 2024.
Bloomberg noted growing concerns among cryptocurrency investors holding USDT, especially after Tether was fined $42.5 million by the U.S. Commodity Futures Trading Commission (CFTC) in October 2021 for "misleading" information related to the collateral backing for the stablecoin.
In its Q2 2023 asset verification report, Tether disclosed a surplus reserve fund of $3.3 billion alongside $72.5 billion in U.S. Treasury bills, ranking among the top 22 entities holding the most U.S. government debt worldwide, surpassing governments like the United Arab Emirates, Mexico, Australia, and Spain.
However, the substantial holdings of U.S. Treasury bills by Tether could potentially lead to liquidity crises, as the process of redeeming funds for users during market volatility, such as the USDT depeg incident following the Curve Finance attack in August 2023, may be time-consuming.
Delays may arise from Tether's need to hold Treasury bills through intermediary banks and adhere to procedural standards, including banks' non-operation over weekends—optimal conditions for USDT attackers.
Tether’s Paolo Ardoino is hardly crypto’s most well-known public figure. That may change when he takes over the reins of the $84 billion stablecoin business https://t.co/mc6sBH3sF0
— Bloomberg (@business) October 20, 2023
Investor apprehensions have deepened due to previous USDT depeg incidents. In June 2023, the largest stablecoin by market capitalization depegged to $0.9959 USD amid negative reports from New York state authorities regarding Tether's 2021 lawsuit.
Similarly, in March 2023, USDT depegged but surged to $1.0077 USD amid the U.S. banking crisis affecting USDC, a major USDT competitor.
Therefore, Bloomberg asserts that the disclosure of real-time USDT stablecoin reserve data will significantly enhance transparency and address mounting concerns within the cryptocurrency investor community.
Despite intermittent concerns, Tether remains the largest stablecoin by market capitalization, dominating over 60% of the stablecoin market segment. USDT circulation continues to expand across global markets, contrasting with declining circulation of the second-largest stablecoin, USDC.
USDT circulation increases amidst bearish market conditions. Source: CoinGecko/Bloomberg
