USD Tether, the stablecoin which reportedly has 1:1 USD backing through reserve banking, has just printed 250 million USDT tokens. This may be indicative of a deposit of $250 million in USD Tether’s bank accounts.
Over recent claims of market manipulation, Tether produced a document that claimed that all USDT was confirmed to be backed up by US Dollars. The confirmation in question was conducted by Freeh Sporkin and Sullivan LLP, who had access to Tether’s accounts at two banks.
The exploration of funds took place over weeks, and the firm released data on how much the company held on June 1. The conclusion that the firm came to was that the amount is equal to the value of all the Tether coins in circulation. The amount was close to $2.54 billion. Tether’s CEO JL van der Velde said:
“Despite speculation, we have consistently stated that Tether is backed by USD reserves at or exceeding the Tethers in circulation at a given moment, and we’re glad to have independent verification of this to answer some of the questions posed by the public.”
Tether is a stablecoin designed to provide a value that does not change with the market. Even though the coin fluctuates, the changes have not changed within $0.05 of 1 US Dollar.
This provides perspective on the recent issuance of coins. As Litecoin [LTC] creator Charlie Lee pointed out about the event:
“Generally, this has been a precursor of price going up. Tether gets printed when people deposit USD and get USDT back. This USDT will then be used to buy crypto. This is similar to someone depositing $250MM to exchanges. Of course, that doesn’t mean they will buy right away. DYOR.”
The comments section of the tweet by Charlie Lee was filled with Twitterati connecting the issuance of Tether over signs of a bearish market. User Rolf said:
“Where did all the #tether $USDT go that entered the market in the past months specifically aug-jan? That was never deducted. Though Bitcoin dropped from 20K to 6K. All that previous USDT should still be at the side line. I call scam!”
Charlie Lee said in response:
“If there’s always more people getting in than leaving, then they will only print more USDT and not need to destroy any. Doesn’t mean that no one exchanges their USDT for USD.”
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