By George Ward
Tether, the leading stablecoin issuer, reportedly maintains a sizable liquidity buffer of approximately $3.3 billion. This practice strengthens the Tether ecosystem as the most popular stablecoins and fosters stakeholders’ trust.
Tether’s Reserves’ Record
Tether’s reserves update, as of August 24, reveals a $3.29 billion surplus in the shareholder capital cushion. The firm distributed this substantial sum across 15 blockchain ecosystems.
Hence, Tether and notable names such as Algorand and Polygon retain the exclusive right to release millions of USDT tokens. This strategic move has strengthened Tether’s position in the cryptocurrency market, positioning it as the most sought-after stablecoin.
The Solana ecosystem also recorded the highest pre-authorized issuance value, with an impressive $1.57 billion. Ethereum and Tron are close behind, taking the second and third spots, respectively.
However, Ethereum has a significant pre-authorization amount of $617 million, while Tron has $353 million. Meanwhile, the stablecoin issuer has yet to release a statement about the importance of pre-authorization and its influence on ensuring user transparency.
Tether’s combined assets are $86.1 billion, while its total liability is $82.8 billion. This indicates that the stablecoin issuer’s reserves are over 100%.
In addition, Tether’s other stablecoins linked to non-USD currencies, such as EURT, CNHT, MXNT, and XAUT, face a different scenario. These assets lack the same liquidity buffer as USDT.
According to reports, none of these non-USD stablecoins have sufficient balances to effectively support and maintain a 1-1 peg to the USD.
Debunking The Absence Of Transparency
Tether’s recent transparency report demonstrates the company’s dedication to dispelling concerns about liquidity and asset backing on its platform. The United States Commodity Futures Trading Commission (CFTC) imposed a $41 million fine on Tether in October 2021, which was a notable incident.
This penalty was imposed in response to the spread of “false” statements about the size of Tether’s reserve holdings. The regulator’s fine sparked widespread skepticism among market participants regarding the firm’s transparency processes.
Nonetheless, it is worth noting that no regulatory agency has expressed concerns or raised red flags regarding Tether’s transparency reports. Since that incident two years ago, the company has consistently shared its transparency reports with the public.
The company’s ongoing commitment to transparency, as evidenced by the release of regular reports, demonstrates its determination to re-establish trust with its customers. In another development, Tether announced that it will discontinue its Bitcoin-based USDT service dubbed the Bitcoin OmniLayer.
The stablecoin issuer further revealed that there would soon be a significant shift in the issuance of its tokens. For instance, new Tether tokens will no longer be created on the Bitcoin Omni Layer or its other networks in the future.
However, the redemption channel will remain open for at least 12 months. Tether’s decision to halt the issuance of the Bitcoin Omni Layer was made based on recent on-chain data.
The OmniLayer team faced significant challenges due to the low adoption of tokens within that network and the widespread availability of USDT on other blockchains. However, Tether emphasized that it is open to a resurgence in using the Omni Layer.
The company stated that it is willing to reconsider issuing tokens on this network if there is a significant increase in Omni’s utilization in the future.