Tether (USDT) Backed by 50% Commercial Paper and Deposit
There is $62.7 billion of USDT currently in circulation. This makes the digital currency the fourth most valuable, ahead of other coins like ADA, BCH, and LTC.
Cryptocurrency exchanges, including CryptoAltum, offer support for USDT. Its users can deposit USDT tokens directly to their accounts and begin trading within minutes.
Technically, USDT tracks the value of the USD. Therefore, every USDT in circulation means an equal amount of USD is held by a custodian, ensuring the peg stands.
On Aug 9, Tether limited released an assurance report conducted by Moore Cayman, an auditor based in the Cayman Islands, saying Commercial Paper and Certificates of Deposit back 50 percent of USDT in circulation. Ten percent of USDT is backed by cash and bank deposits.
However, this percentage keeps fluctuating. For instance, as of March 2021, each USDT in circulation was backed by 76 percent cash and equivalents.
Regardless of the minor controversy around Tether Limited, the issuer of USDT, the digital asset remains one of the most liquid stablecoins. It is a vehicle shuttling traders in and out of traders while protecting them from volatility.