Tether Takes Victory Lap After Stablecoin Regains Peg
Amidst worries that Tether, the world’s biggest stablecoin, was losing its 1-to-1 peg to the dollar, Paolo Ardoino stepped in to reassure investors. Tether’s chief technology officer emphasized that the private company behind the coin that plays a critical role in the crypto ecosystem had no problem with redemptions, including even a $600-million repayment in the last 24 hours.
“Actually the peg was not broken,” Ardoino said on Twitter Spaces Thursday. “It would have been broken if Tether didn’t honor redemption at $1.” Ardoino spoke for an hour together with crypto pioneers Samson Mow, chief executive office of Jan3, and Adam Back, CEO of Blockstream.
Soon after the Twitter Spaces ended, Tether -- known as USDT -- regained its peg, which briefly dropped to 94.55 cents earlier in the day, its lowest level since December 2020. Crypto markets slumped today partly on worries about the future of Tether, where traders park their funds in times of high volatility: About half of all Bitcoin is bought with USDT, per CryptoCompare. A much smaller stablecoin, TerraUSD, known as UST, collapsed this week, and many traders worried that others may follow. Some new crypto users also may have confused UST with USDT.
“That is definitely part of the confusion,” Mow said. “There’s a lot of Tether fud flying around. There’s just a massive confusion and panic in the market.” Bitcoin is down by more than 20% in the last seven days, according to CoinMarketCap.
Much of the Spaces discussion, attended by more than 1,500 people, focused on how Tether is different from TerraUSD. UST’s peg was supposed to be maintained via algorithms and trading incentives, and partly relied on Bitcoin reserves. Tether, meanwhile, keeps more than half of its reserves
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