Tether’s Billion. You are probably wondering, what’s the fuss about it? Let me start by explaining what Tether is. It’s said to be stablecoin because, for one dollar, you can buy one Tether. So, Tether has become one of the main standards to purchase other cryptocurrencies. Also, it can act more like a bank as its stable. In simple words, you can say it’s a form of cryptocurrency.
Now, Tether Holding Ltd., the company that issues the currency, takes payment in dollars from crypto and trading enthusiasts. And in return, they’ll provide them with an equal number of dollars. For example, hypothetically, if I give you 15 dollars, you’ll give me 15 Tethers. And once these people have got their hands on Tether, they can easily send them to different cryptocurrency exchanges and buy BTC and other cryptocurrencies.
Theoretically, Tether Holdings holds onto the dollar bills and returns them to people who send them tokens to get their money back. That’s interesting. Isn’t it? Well, there is a big problem. Let’s take a look at it.
Speculations on Tether’s Backing Policy
When it comes to mysteries, Tether’s backing process is one of them. There has always been speculation about its backing process. Some say that there isn’t truly a backing process in Tether Holdings. The argument has been going long enough to say that I was just a teenager when it started. But the argument was always between a group of critics who says that yes, there are assurances about the backing process. Still, the firm doesn’t have assets to go on with 1-to-1 exchange rates. Basically, those groups are saying that the coin or currency of the company is a scam.
But where a simple meme coin can be worth of billion dollars, then why not give tethers the benefit of the doubt of it being something of greater importance. So, to date, Tether is another ball in the field of curiosity.
Now, we all know how 2021 has been a year for crypto. And during this time Tether Holdings has all of a sudden start to put out vast amounts of digital coins in circulation. For the sake of actual metrics, the firm now has 69B Tethers in circulation, and out of 69B, 48B tethers were issued this year itself. So, Tether Holdings should have $69Billion to back those coins in the language of straightforward money. And if it’s true, and they have the money, then this would put Tether Holdings in the list of 50 largest banks in the U.S. Sadly, it’s not a U.S. Bank. Otherwise, today the headline would be a little different.
So, the mystery of Tether’s $69B continues…
Some regulators have their concerns about the money they are holding back. The holdings are so significant that it would be difficult to assume that the dollars they are having are even real. If traders start asking for their money back, then there’s a possibility that the company may end up selling some of its assets. And the losses would cause chaos in the regular financial system, which would result in the deterioration of the credit markets.
So the mystery is still to resolve because reports say that their bank partners are not sure about the extent of their holdings. They doubt the existence of the holdings. You might be thinking why such a statement all of a sudden. That’s because one of Tether’s former bankers said that its top executive has continuously put reserves at risk by investing them to earn hundreds and millions of dollars. John Betts, who ran a bank in Puerto Rico for Tether, says that it’s not a stablecoin; instead, it is a high-risk offshore hedge fund.
What do the lawyers have to say about Tether’s Mystery?
Tether Holdings Ltd. has its lawyer Stuart Hoegner saying that Van der Velde and Devasini are avoiding the limelight for the moment. Hoegners says that the firm has always maintained clarity, comprehensivity, and a sophisticated risk management framework for security purposes. He adds that there has been no such incident where the customer has asked for their money back or didn’t get it.
Again, when people asked where Tether Holdings was keeping its money, Stuart declined to answer that question. Stuart also said that the company has enough cash to cover most money to pay out in a single day. Also, after this personally, he sent an email to the interviewer that whatever he answered or said was all misinformation shared by specific unpleased individuals. And those individuals had no direct or indirect contact with business operations whatsoever. He finally says that success always speaks for itself.
So, what do you think about this mystery? Where do we find the $69Billion that Tether Holdings is hiding? Let us know by commenting on your thoughts about the mystery. And if you found our content informative do like and share it with your friends.
Also read: J.P. Morgan says investors are dumping Gold for Bitcoin.
