Ever since Tether (USDT) was first listed on Bitfinex back in 2015, crypto traders have preferred the stable coin whenever the Bitcoin (BTC) and the cryptocurrency markets took a turn for the worst. This is due to the fact that USDT is pegged to the $1 value. The value of USDT can sometimes fluctuate by a few decimal points due to demand issues, but its price is never that far away from the $1 mark.
This controlled stability embedded into the inner core of the digital asset has allowed it to be a safe haven for many traders during times of turmoil. A better understand of how USDT manages to always be pegged to the USD can be found in the project’s whitepaper.
Tether’s history has been riddled with fears that the digital asset is not backed by actual USD in bank reserves as reported by the parent company with a similar name. On October 15th, these fears reached a peak when rumors spread that Binance was delisting the stable coin. These rumors caused the value of BTC to spike from $6,300 to $7,680 in a matter of minutes as traders rushed to dump their USDT for Bitcoin.
New Declaration of Banking Balances
The delisting fears were as a result of news that the bank Tether was using at the time was facing some issues. The bank, known as Noble Bank, was reported as being insolvent as early as the 1st of October and unable to pay debts owed.
A few days after the delisting rumors, Tether released a new report confirming its bank balance with a New Bank in the Bahamas: Deltec Bank and Trust Limited.
Damage Was Probably Already Done
Since then, we have been seeing numerous exchanges combining their Tether markets into one stablecoin market. The first one to do so, was Huobi back in mid October. Exchanges have also taken upon themselves to list more stablecoins to provide more options for their clients.
Binance’s New Stable Coin Market
On the 27th of November, the crypto exchange of Binance announced that it was renaming its USDT market to a Combined Stablecoin Market (USDⓈ). According to the exchange, this move is to support more trading pairs with different stablecoins offered as a base.
The new market and symbol is not a new coin, but a market where other stablecoins such as Paxos (PAX), TrueUSD (TUSD) and USD Coin (USDC) will be added.
Since the announcement of the new stablecoin market was made only hours ago, Binance announced that it was adding new PAX trading pairs to the market as soon as tomorrow, the 29th of November.
Summing it Up
Tether’s role as the preferred stablecoin has begun to fade away as we see the entry of new stablecoins in the crypto markets. One can argue that the turbulent crypto markets presented a need for stablecoins and hence the increase of such options for traders. Another argument can be that the continual doubts the crypto-verse has had with Tether, is the cause for the creation of the new stablecoins that we are seeing now.
What are your thoughts on Tether and the new stablecoins now available? Please let us know in the comment section below.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.