By now, if you have been in crypto for any length of time, then you have heard something about Tether’s USDT stablecoin. What is most likely is that you have heard that USDT’s reserves have not ever been truly proven over the course of its’ history.
Today, that has changed, though whether or not the change is a good thing for the future adoption of USDT remains to be seen. The specific announcement which is being used as a primary source by CoinDesk and others reportedly states that USDT is fully backed, but not exclusively by what the company calls “traditional currency.”
While, as of now, they have not specified what exactly this means, they have made clear that this includes other assets which are taken in, in exchange for USDT loans. Speculating further on what this means would be inadvisable at this point without more hard data on the subject.
Still, this announcement does remind us of the importance of one question that no firm seems to have completely answered. Shouldn’t stablecoins be fully audited, at least once a year? Related to this, are attestations an acceptable substitute for this, since they seem to be the alternative route that just about every stablecoin company, including Tether, seems to be taking?
In Tether’s case, matters become even more uncertain when one takes into account the fact that until this announcement, they had been steadfast in their claim that all of their coins were always equally backed by US Dollars.
This uncertainty actually extends beyond USDT. If knowing this should teach crypto investors anything, it is that until this transparency issue is solved, it would appear to be inadvisable to trust any stablecoin project, without doing a considerable amount of research on its’ holdings first.
By: BGN Editorial Staff