Stablecoin Tether Holdings Ltd. restored the entire market value of about $20 billion.
Stablecoin lost value after the collapse of algorithmic competitor TerraUSD just over a year ago. The circulating stock of the digital asset, which is the most actively traded in the world, exceeded the previous record value of $ 83.2 billion, which was recorded in May last year. This information was published by Tether, a company based in the British Virgin Islands.
The firm’s USDT stablecoin is pegged to the dollar one-to-one and supports this value with cash reserves and cash-equivalent assets.
The restoration of USDT is a confirmation of the dominant role that belongs to it as a means for conducting transactions and storing value in the field of cryptography. The circulation of the stablecoin decreased by about 20% in the second quarter of last year. This happened against the background of the collapse of Terra, which became the beginning of the destabilization of the situation in the cryptocurrency markets. After that, a difficult period of numerous bankruptcies, high-profile scandals, and a significant decline in the value of most digital currencies began.
The circulation of USDT has grown in recent months, when its main competitor, USDC Circle Internet Financial Ltd., declined, and the volume of crypto trading, in general, remained insignificant.
According to researcher Kaiko, the current positive dynamics have exacerbated the problem of ambiguity, which concerns the dominant stablecoin. USDT is used in more than 50% of all transactions on centralized exchanges, but the market share of Tether compared to other stablecoins has not shown significant growth during the downturn in activity.
Changes in the use of USDT on decentralized exchanges, which provide an opportunity to trade without intermediaries, do not in themselves explain the positive trend.
In the past, industry observers have wondered whether USDT Tether was supported by sufficient reserves, which are a full and fair basis for the requirement of linking the one-to-one format
In 2021, the company reached an agreement with the Attorney General of New York regarding the planned merger of client and corporate funds. As part of this interaction, the issue of accusations of providing investors with false data about the reserves available to the firm was also settled. Tether and its subsidiary crypto exchange Bitfinex have always denied involvement in any violations.
As we have reported earlier, Tether Announces $960 Million In Excess Reserves.
