Bitfinex Faces Further Scrutiny Over Tether Liquidity Concerns

Keeping a smaller currency constantly pegged to a larger national one, to a regional one or even to a global reserve currency, is a difficult task which many central banks around the world have failed to do in the past in times of crisis. When enough speculators attack the currency, or capital outflows are just too great to handle, keeping the peg becomes unsustainable and it cracks. Despite this the people behind one controversial altcoin, Tether, are trying to achieve just that.

Unbreakable  Tether?

Now the entire Tether idea is coming under intense scrutiny by voices in the cryptocurrency community in online forums and social media where people are raising their concerns. The most recent spark for this maelstrom is an apparent unintentional admission by the Tether PR team that the USTD is backed by other cryptocurrencies and not the USD. This means that in case of a crisis analogous to a traditional ‘run on the banks’ Tether might not be able to back up all its USTD with hard fiat cash…

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