Tether (USDT): A Threat to The U.S Dollar, Hence the Backlash
Currently, no country has fully embraced cryptocurrency apart for Venezuela and its proposed Petro Coin being pushed by President Nicholas Maduro.
Then comes Tether (USDT) that looks very much like the digital version of the U.S Dollar. It even has similar stability in the various exchanges that it appears in. I believe this aspect is the genesis of all Tether’s problems.
Currently, Tether (USDT) is tradable on Binance, OKEx, Huobi, HitBTC, Polinex, Bittrex just to name a few. These exchanges have a current daily trade volume as follows:
- Binance – $2 Billion
- OKEx – $2.2 Billion
- Huobi – $1 Billion
- HitBTC – $377.3 Million
- Poloniex – $244 Million and
- Bittrex – $448.3 Million
I guess by now you are beginning to see why Tether being accessible in all these digital platforms, and having a similar acronym/symbol to that of the United States Dollar, can assist in making lots of enemies for the founders and the coin itself.
The enemies are the U.S regulators who have raised a red flag with respect to the 2.2 Billion USDT coins that are allegedly backed by hard currency in a similar amount by the parent company somewhere in a financial institution.
The U.S regulators want to see this hard cash. To give you a mental cue of that amount of money, Armenia has an annual GDP of $2.37 Billion.
No wonder Tether (USDT) is making so many enemies in the form of US Regulators. Hence the recent subpoena on Bitfinex for an alleged connection between the two companies.
But Tether has replied to the U.S regulators with a public statement proving that the funds do exist. The statement is on the website and it is from an accounting firm called Freidman LLP Accounts and Advisors.
The accounting firms seem to have done an audit of the bank balances of Tether and can confirm that there is $2.2 Billion in a bank account somewhere. They also state that Tether is designed to retain its value in a one to one ratio to that of the United States Dollar (USD).
So what is next for Tether (USDT)?
In my opinion, Tether has two paths moving into the future.
Firstly, the coin and parent company need to keep doing what they are doing. Their main goal and objective of the project and coins are to facilitate the transfer of national currencies.
Tether also provides users with a stable alternative to Bitcoin (BTC) and other digital currencies when the waters of the Cryptocurrency markets are a bit ‘choppy’ like the last two months.
One good example is when I was trading on Binance and all hell broke loose. Dip! Dip! Dip! Panic! Panic! Panic! I quickly converted everything to Tether (USDT) and held on to dear life.
The second option for Tether is to push for a partnership with the same regulator that is after the coin. Yes! Embracing the enemy. This is one tactic any student of The Art of War would appreciate. If the enemy is too large, form an alliance rather than go to war. This means that Tether can plead its case and probably have some U.S government transactions carried out in USDT coin.
In summary, Tether poses a threat to the U.S Regulators for it claims to have a $2.2 Billion reserve to match the coins in circulation.
This is a large amount to have stashed away in a bank account. The reaction by the U.S regulators is a natural response since Tether is attempting to shake the traditional way of doing things.
Also, the only way for Tether (USDT) from now is to keep doing what it was meant to do and possibly embrace the U.S Regulators rather than coming out as a formidable foe.