The USDT issuer company Tether again showed that USDT stablecoin is strongly pegged with a $1 value.
Tether is a stablecoin company, which operates its stablecoin USDT. USDT is the first-ranked stablecoin in the crypto market. Tether is a subsidiary of crypto exchange Bitfinex. The Bitfinex Exchange team was the first to bring the concept of stablecoin to help crypto users to transfer funds from one exchange to another within banking services. In short, we can say that USDT is enjoying a first mover advantage in this innovative industry.
Tether promised to the USDT Stablecoin users this year that it will reduce its commercial paper holdings, to back the USDT stablecoin with better assets & cash reserves.
In Q2 2022, Tether reduced its commercial paper holdings from $20 billion to $8.5 billion. Interestingly it is more than a 58% decrement in the commercial debt holding, which sounds good that Tether is doing everything to maintain its position in the crypto Industry as a number one stablecoin.
This time, Tether said that it will reduce commercial debts by around $200 million by the end of August and will vanish to zero by the end of 2022. Perhaps, earlier this, Tether announced that it will reduce the commercial paper holdings to zero before October or November of this year but here company seems struggling & may take some significant time to do the same.
In the last three months, Tether increased its cash & assets holdings by more than 32%, which also sounds good for the USDT Stablecoin users.
USDT facing competition
In May of this year, Extreme volatility in the crypto market shaked many crypto businesses, which were based on bad business models. The collapse of Terra’s UST stablecoin showed that it was a big bad model.
After the collapse of the UST stablecoin, many other stablecoins faced de-pegging in their values. Even though Tether, which is known as the best Stablecoin, faced a correction in value by 2%.
These things showed that USDT Stablecoin users were not 100% sure that Tether was doing work properly to maintain the reserved funds behind USDT.
In these hurdles, USDC stablecoin grabbed huge traction and now USDC stablecoin numbers are high over USDT at some networks, which is showing the actual competition for Tether.