Tether USDT discount on exchanges hit 5-month high following revelation of collaboration with US authorities News โธ US โธ Tether โธ Stablecoins
Tether USDT discount on exchanges hit 5-month high following revelation of collaboration with US authorities
Tether's collaboration with the U.S. authorities has drawn extensive criticism from crypto stakeholders.
2 min read
Updated: Dec. 18, 2023 at 1:08 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Tether’s USDT stablecoin discount on centralized exchanges like Binance and Coinbase has widened to its highest point since July, according to data from Paris-based crypto data provider Kaiko. This follows the stablecoin issuer’s recent revelation of its extensive cooperation with the U.S. authorities.
Data from CryptoSlate corroborates this finding, with the USDT stablecoin currently trading for $0.99911 as of press time.
CoinMarketCap data further shows that the discount can be found on major centralized cryptocurrency platforms like Coinbase, Kraken, and Binance. Interestingly, the discount is not evident on Bitfinex, a cryptocurrency exchange owned by Tether’s parent company, Hong Kong-based iFinex Inc.
The cause of the discounts remains unknown as of press time. However, Tether has previously maintained that market-making issues usually cause price deviations on cryptocurrency exchanges.
Tether’s USDT unrivaled growth
The current discount in Tether’s valuation on the heels of the stablecoin’s rapid expansion for this year
With a market capitalization surpassing $90 billion and a 70% dominance among U.S. dollar-pegged stablecoins, Tether is one of the fastest-growing stablecoins, minting over $23 billion worth of new tokens this year alone. This figure equals the total market capitalization of its biggest rival, Circle’s USD Coin (USDC).
While some industry experts view this growth as indicative of Tether’s robust fundamentals, others express skepticism, considering it an unsustainable trajectory.
Tether’s collaboration with the authorities
Meanwhile, Tether’s recent revelations of its extensive collaboration with the U.S. authorities have drawn extensive criticism from the crypto community.
CryptoSlate reported that Tether froze 326 wallets containing $435 million of its stablecoin for the U.S. authorities, including the U.S. Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Secret Service.
According to the stablecoin issuer, the actions were done to assist law enforcement agencies in combatting the illicit use of stablecoins.
Following the news, Checkmate, the lead on-chain analyst for prominent crypto analytics platform Glassnode, described Tether as a Central Bank Digital Currency (CBDC).
Other crypto stakeholders, including Cardano founder Charles Hoskinson, were surprisedย at the actions of the stablecoin issuer.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
USD Coin
$0.99961
USD Coin (USDC) is a stablecoin fully backed by the US dollar and developed by the CENTRE consortium.
Tether Limited
Tether Limited is the company that introduced Tether (USDโฎ or USDT), an asset-backed cryptocurrency stablecoin, in 2014.
Bitfinex
Bitfinex is a digital asset trading platform offering state-of-the-art services for digital currency traders and global liquidity providers.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Kraken
Kraken is a San Francisco-based digital asset exchange in euro volume and liquidity that trades various currencies, including Canadian dollars, US dollars, British pounds, and Japanese yen.