Over the past few months, we have come across a few reasons to grow weary of the Tether project. After the team created millions of USDT out of thin air, many people were eager to see whether the com
TETHER IS STILL RISKY BUSINESS
While it is good to see the company issue a new financial statement regarding its assets just last week, there are still some issues associated with Tether which can’t be squared away with such a PDF file. The issuance of millions of USDT in quick succession caused a lot of confusion among cryptocurrency users last month, but it seems the company does have the USD balance to warrant this sudden influx of USDT across exchanges.
As most people are well aware, the USDT is a digital representation of one US Dollar. However, the “Tether dollar” is not issued by the Federal Reserve and has always been somewhat of a controversial cryptocurrency in this regard. With its value fixed at US$1 per token, there is no room for speculation either, which can be considered both a good and a bad thing right now. Backing all tethers with actual assets is not an easy feat, especially with nearly half a billion tethers in circulation right now.
Tether’s success is pretty significant, but it is also cause for concern. There is no restriction on who can use Tether right now, and it is certainly possible this digital token will be involved in money laundering schemes at some point in the future. We have seen various governments crack down on cryptocurrencies because of this potential risk. Moreover, the bank account which stores all US dollars associated with the current USDT in circulation is still considered to be a central point of failure.
More: Will the Federal Reserve Go After Tether? – The Merkle