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Tether, the controversial stablecoin which claims that each token issued is backed by one US dollar, has hit the news today as the claims become evidenced by finances. The news agency Bloomberg has reported that they have seen insight into Tether’s (USDT) finances which suggest that the cryptocurrency is not only performing well but also that the claims appear to be true.
The financial statements, which span over four months, detail the cash held in Tether’s accounts. Bloomberg managed to match the amount on the statement to how many Tether tokens existed at that date. For example, a statement dated January 31 shows that $2.2 billion existed in Tether’s account, and on the same day 2.195 billion Tethers also existed.
It can’t be conclusively determined that every Tether coin is backed up by $1, but the statement does mean it is possible, if not likely. The statements seen by Bloomberg lacked any real insight from Tether or any transparency from the company to help interpret the statements as Tether see them. For example, it isn’t possible to say where the funds originated or where they are currently.
Tether has always been somewhat controversial because, despite the claims for being backed by the dollar, the company has failed to provide a promised audit proving the claims. On August 12 the Wall Street Journal interviewed Author David Gerard who was quoted as saying that Tether:
“is sort of the central bank of crypto trading … [yet] they don’t conduct themselves like you’d expect a responsible, sensible financial institution to do.”
Today’s news will provide some comfort and clarity for people in the crypto space. Tether is the sixth most valuable cryptocurrency at $1.9 billion, and almost a third of all Bitcoin transactions on exchanges use Tether. Tether dropped from $1 to 85 cents in October amid fears that that cryptocurrency company had lost its Puerto Rican banking partner Noble Bank.
It will be interesting to see how this news shapes Tether’s standing in the public sphere. Google searches for Tether bring up posts from social media or other popular forum and discussion based social media sites, questioning the validity of the stablecoin. Search terms like “is Tether a scam?” are common. Many people are worried that something isn’t right with the cryptocurrency, and that a lot of people are going to be left holding a worthless digital coin. It now looks like that might not be the case.