© Reuters. FILE PHOTO: A representation of the Tether cryptocurrency placed on the motherboard of a PC, in this illustration taken June 16, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -The number of dollar-pegged stablecoins issued by has exceeded $100 billion, the cryptocurrency company said on its website on Monday.
Tether issues a stablecoin that is designed to maintain a constant value of $1. It is widely used as a way to move money in cryptocurrencies without being exposed to price swings in other cryptocurrencies such as bitcoin and ether.
The company says it maintains its peg to the dollar by maintaining dollar-based reserves that match the volume of cryptocurrencies it has created.
While the dollar-pegged Tether token is pegged at $1, it has traded as high as $1.0020 in recent days, reflecting increased demand from investors betting on a rising bitcoin and using Tether as a medium to trade. fiat currencies for cryptocurrencies.
“Traders were willing to pay a premium for Tether to be able to execute their orders,” said Justin D'Anethan, head of Asia-Pacific business development at digital asset market maker Keyrock.
“Ironically, Tether has always been plagued by anxiety about its legitimacy, as it resisted disclosing its reserves and balance sheet for years,” D'Anethan said.
“However, they have existed and stood the test of many volatility events, from 2017 until now, and an overwhelming majority of cryptocurrency pairs are denominated in USDT, which explains the premium in times of massive bull runs and enthusiasm for cryptocurrencies. space.”
About $124 billion worth of tether had changed hands in the past 24 hours, data from CoinMarketCap showed.
US regulators have warned banks that stablecoin reserves could be subject to rapid outflows, for example, if holders rushed to exchange such tokens for traditional currency.
Tether agreed to provide quarterly reports on its reserves for two years, as part of a 2021 settlement with the New York Attorney General's office.
At the end of 2023, Tether reserves contained $63 billion in US Treasuries, as well as $3.5 billion in precious metals, $2.8 billion in bitcoin, $3.8 billion dollars in “other investments” and $4.8 billion in “secured loans,” according to its latest report.
