A recent update by the world’s most popular and highest ranking stablecoin — Tether (USD₮) , reveals that the coin might not be fully-backed by the US dollar like it previously claimed.
Tether (USD₮) Updates its Website
This new detail was revealed via a recent update on the stablecoin’s website. The update made it known that the stablecoin’s reserve might sometimes be comprised of assets different from the US dollar. This revelation is a significant deviation from Tether’s original claim: that the stablecoin is fully backed by the US dollar.
The update on the website reads that:
“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.”
Before this update, the content addressing the backing of the stablecoin states that:
“Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.”
This is not the first time Tether which is the largest stablecoin on the market right now will be facing backlash regarding its reserve.
Last year, Tether was Audited by, Freeh Sporkin & Sullivan LLP (FSS). The result of the audit carried out revealed that the value of Tether in the company’s accounts exceeding the US dollar value of all coins in circulation that day.
Steeming from the fact that the community was then sceptical about the claims of Freeh Sporkin & Sullivan LLP (FSS), an independent audit was requested for.
Furthermore, an academic paper released by John Griffin, a finance professor at the University of Texas, suggested that Tether was used to supply artificial price support during Bitcoin’s spike in December 2017.
The stablecoin has also partnered with Tronto integrate USDT on the Tron blockchain.