Would USDT become Dominant Globally

Tether is the world's third-largest cryptocurrency by market value. And it's disturbed some economists, including a Federal Reserve official in the United States.

According to its website, Tether (USDT) is a stablecoin that is tied to the U.S. dollar and is "100% by Tether's reserves" backed. The Hong Kong-registered corporation iFinex, which also operates the cryptocurrency exchange BitFinex, is the owner of Tether.

Real Coin, the name under which Tether first debuted in July 2014, was replaced by Tether in November 2014. It first went public in February 2015. Tether, which was initially built on the Bitcoin blockchain, now works with the Ethereum, TRON, EOS, Algorand, Solana, OMG Network, and Bitcoin Cash (SLP) blockchains in addition to the Bitcoin Omni and Liquid protocols.

Tether, which had a market valuation of close to $83 billion as of May 2022, was the largest stable coin and the third-largest cryptocurrency after Bitcoin (BTC) and Ethereum (ETH). Tether's USDT made up 2/3 of all Bitcoin exchanges in value in April 2022.

Some investors and economists are concerned that tether's issuer lacks sufficient dollar reserves to justify its currency peg. Tether depleted its stablecoin reserves in May. The company stated that only 2.9 percent of its holdings were in cash, with the vast majority in commercial paper, a type of unsecured, short-term debt. According to JPMorgan, this would position Tether in the top ten largest holders of commercial paper in the world. Tether has been likened to regular money-market funds, but without any of the regulations.

Tether has more deposits than many US banks, with more than $60 billion in tokens in circulation.

Concerns have long been raised regarding whether tether is being used to manipulate bitcoin prices, with one study stating that the asset was used to prop up bitcoin amid significant price drops during its monstrous 2017 rally. The New York attorney general's office negotiated an agreement with Tether and Bitfinex, an affiliated digital currency exchange, earlier this year.