Tether CTO Addresses Stablecoin’s Fiat Backing As $USDT Launches on Kusama ($KSM)
https://ift.tt/ArJ9vGj
On Wednesday (April 13), Paolo Ardoino, CTO at Tether (and Bitfinex), said the fiat-backed stablecoin issuer has been taking “enormous steps” to increase transparency and to “reduce dramatically” its exposure to commercial paper.
Tether, which was launched in 2014, is the issuer of the dollar-pegged stablecoin with the same name. Tether tokens are supported on multiple blockchains: Bitcoin (Omni & Liquid protocol), Ethereum, TRON, EOS, Algorand, Solana, OMG Network, and Bitcoin Cash (SLP).
Tether claims that “all Tether tokens are pegged at 1-to-1 with a matching fiat currency (e.g., 1 USD₮ = 1 USD) and are backed 100% by Tether’s reserves,” and that “the reserves match or exceed the amount required to redeem all Tether tokens in circulation.”
Tether supports multiple currencies: U.S. dollar (USD), euro (EUR), and offshore Chinese yuan (CNH). These tokens are denoted as USD₮, EUR₮, and CNH₮ respectively.
Yesterday (April 13), Kusama ($KSM), which serves as the”canary network” for Polkadot ($DOT), became the ninth blockchain to support $USDT; the other eight are Bitcoin (Omni and Liquid protocol), Ethereum, TRON, EOS, Algorand, Solana, OMG Network, and Bitcoin Cash (SLP).
Peter Mauric, Head of Public Affairs at Parity Technologies, told CoinDesk via Telegram:
“Different builders and institutions have their own preferences on the tech stack and products they interface with, and there is plenty of room for a variety of options within the crypto ecosystem. Tether’s deployment on Kusama is a clear indication that there is interest in having it available to builders in the Polkadot ecosystem alongside the Polkadot-native options that are launching as well.“
Mauric added that Tether will also be coming to Polkadot:
“Timeline is to be determined but I suspect that this Kusama deployment will serve much of the same ‘canary effect’ we saw in the Polkadot launch process for the relay chain and parachains, as a real world proving ground for the tech before it is ready for production on Polkadot.“
As for the Tether CTO’s comments about $USDT, they were made during an interview in Paris yesterday with Arjun Kharpal, a senior technology correspondent at CNBC.
Ardoino had this to say about how Tether is trying to address concerns about how $USDT is backed by fiat currency:
“First of all, it is almost one year… from my conversation, our conversation with Deirdre. Since then, we took enormous steps to increase transparency and also reduce dramatically our exposure to commercial papers...
“In 2021, we started providing the quarterly attestations, and as you might know, we are also providing this information on a quarterly basis to the AG of New York… So the first attestation, we started also to provide the breakdown of reserves. We were the first stablecoin to do that… So that is when the information about the commercial paper came out...
“We got questions about that… What we did in order to increase transparency… we also released something that others did not have at the time: that was the breakdown of all the ratings of the commercial papers and the other instruments.And then it became public and understood by our community that the vast majority of the commercial papers were rated A2 or better. That is basically the rating of the best financial instruments trusted by all the Americans, and that is similar to what the treasures have, for example…
“And just in the last quarter alone, we dropped the exposure to commercial papers to 21%. So, we listened to our community… and over time, we will keep reducing the commercial paper. We are not finished yet with the reduction, and all what had been reduced on the commercial paper side has been put in U.S. Treasuries.“
Disclaimer
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
Cryptocurrency
