Tether Limited, a government registered company that is responsible for the issuance of Tether USDT, has withdrawn almost 25 percent of all USDT from circulation. The number of USDT has fallen from around 2.8 billion to 2.008 billion.
Tether has not issued any Tether (USDT) since September 21. As the Omni Explorer shows, Tether did not issue any new tokens in October. Instead, Tether Limited has sent a total of 690 million tethers (USDT) back to its treasury account, taking it out of circulation.
This marks the sixth time the company pulled USDT out of circulation by sending them to the Tether Treasury. A large part of the transfers (USD 580 million) has been made since 14 October. Remarkably, most of the outflows were either on or just before USDT lost its value against USD. The USDT price slid up to $ 0.92.
At the time of writing, Tether has still lost its peg to the U.S. dollar. The price of Tether currently stands at $ 0.9821, according to data from CoinMarketCap.
The rise of other stablecoins?
One possible explanation for the weakness of tether could be the rise of other (new) stablecoins. Tether users could have traded them for one of the newly introduced “regulated” stablecoins, such as the Gemini Dollar, Paxos or the somewhat longer existing TrueUSD (TUSD). These newcomers have provided more stability to the market. In fact, these stablecoins are trading at a premium to both the USDT and the physical dollar itself.
If one compares the circulation amounts of the three competitors in total with the 2 billion of tethers, the competing stablecoins are far behind the market leader. Nevertheless, there could be a change of power. Should investors continue to lose faith in Tether’s reliability and stability, it could be faster than expected. And whether Tether Limited will withdraw all USDT from circulation remains to be seen.