The controversial stablecoin Tether[1] generated $250 million worth of new USDT tokens on May 18, according to Omni Explorer[2].
Tether is the company that issues the so-called stablecoins USDT, which it claims are backed at 1:1 ratio by US dollars. Tether has been criticized for its lack of transparency after it broke ties[3] with auditing firm Friedman LLP before an official audit could be conducted.
With a near monopoly on stablecoins, the total supply of Tether tokens has now risen to 2.5 bln, and some critics find it hard to believe that all of those tokens are backed by US dollars.
One such critic is anonymous blogger Bitfinex’ed, who has pointed out[4] the correlation of Tether coin generation with price increases of mainstream cryptocurrencies like Bitcoin and Ethereum. According to Cointelegraph’s BTC[5] and ETH[6] price indices, the price of Bitcoin increased approximately by $120 and Ethereum by $10 within an hour of the issuing of the $250 million worth of new Tether tokens.
Bitfinex, one of the largest exchanges for cryptocurrencies, is a sister company[7] of Tether and has threatened[8] legal action against critics such as Bitfinex’ed for questioning Tether’s 1:1 ratio with USD, a fact still unproven in the absence of an audit.
Tether might not be the only contender in the stablecoin sphere, as new players like Circle[9], backed by Goldman Sachs, TrueUSD[10], and Basis have begun developing their own stablecoins.
References
- ^ Tether (cointelegraph.com)
- ^ according to Omni Explorer (omniexplorer.info)
- ^ broke ties (cointelegraph.com)
- ^ has pointed out (cointelegraph.com)
- ^
