Controversial ‘Stablecoin’ Tether Is Now the 10th-Largest Cryptocurrency

Embattled “stablecoin” tether has become the 10th-largest cryptocurrency.

Tether’s eponymous token, which the company claims is backed by physical USD at a 1-to-1 ratio, has long been controversial in cryptocurrency circles, and debates over whether it presents the industry with a systemic risk have increased over the past 18 months in lockstep with USDT’s swelling market cap.

The firm issues new tokens when large-scale cryptocurrency holders such as hedge funds or cryptocurrency exchanges deposit physical USD in Tether-controlled bank accounts. These tokens can then be used as a proxy for physical fiat currency on exchanges that do not have the requisite banking relationships or licenses to hold fiat on behalf of their customers.

Yesterday, Tether made its first significant USDT issuance in more than a month, creating 250 million new tokens to raise the token’s market cap by a corresponding $250 million. The release of these new tokens, along with the general downtrend in the wider cryptocurrency markets, enabled tether to sneak past Tron’s TRX token for the 10th spot in the market cap rankings.

tether
Source: CoinMarketCap

According to the company’s website, Tether is currently holding more than $400 million in its reserve bank accounts that has been authorized for issuance but not tokenized. If these tokens hit the market today, the development would push USDT’s market cap over the $3 billion threshold and propel tether past IOTA to become the ninth-largest cryptocurrency…

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