The transparency report released by the stablecoin issue Tether on Thursday, August 24, reveals a $3.3 billion liquidity cushion. The report discloses that Tether’s total assets are estimated at $86.1 billion, with its liabilities averaging $82.8 billion. The transparency report shows that the reserve backing exceeds 100%, thus offering over $3 billion liquidity cushion.
The transparency report details that the liquidity cushion yields stability to the ecosystem while garnering the trust of the shareholders. The Thursday report shows that the cushion comprises a combined surplus of the shareholder capital held in over 15 blockchain ecosystems.
Tether Discloses Pre-Issuance Authority in Ethereum and Tron
Besides Polygon and Algorand, Tether could exercise the reserved authority to initiate millions of USDT tokens issuance. The report indicates that the Solana ecosystem takes the pole position in value of the pre-authorized issuance, presently at $1.57 billion. Ethereum and Tron occupy the subsequent slots at $617 million and $353 million respectively.
The transparent report hardly detailed the essence of the pre-authorization issuance. Also, the report did not disclose the impact of the pre-authorization issuance on winning trust among the masses.
Besides disclosing that Tether’s reserve backing exceeds 100%, the report indicates that other non-US dollar stablecoins hardly match the liquidity. It indicates that the Tether’s umbrella comprises Tether Gold (XAUT) 246,524 units and Mexican Peso Tether (MXNT) $19.562 billion.
Also, it features Tether Chinese Yuan (CNHT) ¥ 20.503 million and Tether EURt (EURT) €36.387 million. Failure to match the liquidity in USDT leaves other non-US issues with deficient balances unable to sustain the 1:1 peg during the crisis.
Tether Discontinues Bitcoin Omni Version
The transparency report dismisses the concerns about reserve assets and liquidity stability. It is unlikely that Tether would issue dishonest and misleading financial backing statements.
Such arises from the awareness of a $41 million fine imposed by the Commodity Futures Trading Commission (CFTC). The regulator imposed the fine in October 2021, citing falsified disclosures regarding the reserve holdings. The authorities are yet to detect replication of such conduct targeted at hoodwinking unsuspecting investors.
Tether is releasing the transparency report shortly after confirming the discontinuation of the Bitcoin version USDT, identified as the Bitcoin Omni Layer. The largest stablecoin issuer with an estimated market capitalization of $83 billion indicated that it would reconsider whether to restore the Bitcoin version later. Also discontinued are versions running on Kusama and Bitcoin Cash.
Tether assured that it would retain redemptions on the platform for 12 months, though it would readily reissue the Omni Layer if it realized a usage turnaround.
Tether’s Restore Presence on Bitcoin Blockchain Amid Fierce Competition
The August 17 statement indicated that the Omni Layer confronted multiple challenges, the key being the absence of popular tokens on the blockchain. Also, Tether’s USDT was readily available on other blockchains, allowing exchanges to prefer transport layers other than Omni.
News of discontinuing the Omni Layer version coincides with Tether disclosing it is working on another Bitcoin smart contract identified as RGB. Its completion would restore Tether to the Bitcoin blockchain.
The initiative to maintain a presence within the Bitcoin blockchain is critical, considering that Tether is bound to face off against newly launched stablecoins.
It is interesting to monitor the ultimate development, considering that PayPal threw its hat into the stablecoin on August 7 by unveiling PayPal USD (PYUSD). PayPal’s move came days after Binance revealed on July 26 that it was listing the First Digital USD (FDUSD).
Stablecoin Segment Witnesses Realignment in Readiness of Upcoming Legislation
Besides the RGB project by Tether, the stablecoin is witnessing realignment led by Coinbase and Circle for the USDC Coin. The two firms announced the dissolution of the Centre Consortium, citing strategic realignment influenced by the need to comply with the upcoming legislative changes from the US Congress.
Binance.US also has an advanced interest in sustaining operations. The exchange indicated partnering with MoonPay involving dollar-pegged USDT stablecoin as the base asset for entire transactions. It projects that the partnership yields a path for its users to execute transactions in dollars, possibly to avert potential regulatory hurdles.
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