Bitfinex CEO dismisses reports of Tether, investors fret over stability

39
2
Bitfinex CEO dismisses reports of Tether, investors fret over stability

On May 12, Bitfinex CEO Paolo Ardoino dismissed reports that Tether was in trouble. In the early hours of May 12,USDT had shown signs of de-pegging, as its price dropped as low as $0.9410.

With markets still reeling from the loss of its $1 peg, a similar situation could have set off a ice age for Tether.

The majority of the liquidity in the markets are due to the fact that the most stable coin is paired by market cap and market cap.

Critics say the events of this week highlight the fragility of private stable coin. The UST fiasco has caused the loss of billions of dollars, authorities say stricter rules on stable coins will be coming.

Ardoino tried toreassure investors, despite the drama, by saying that the peg was not broken. He referred to the firm's ability to redeem token instead of its price on exchanges.

The USDT holders can redeem their token on the Tether website for $1 per token. Even though exchange prices were sinking, token holders were still able to cash out at face value minus verification and withdrawal fees.

On May 12, the firm was sufficiently liquid to redeem $600 million of USDT with no problems, according to Ardoino. A broken peg is a problem with the ability to redeem token at face value because of the fact thatUSDT is backed by a fiat-backed stable coin.

The price ofUSDT went up soon after the Spaces conversation ended at $0.9955, much to the relief of the community.

The incident was a major test of investors' nerves, which were already heavily frayed after the loss of billions via the Terra ecosystem.

In a live panel debate hosted by the Official Monetary and Financial Institutions Forum, SEC Commissioner Hester Peirce said this week s events forced regulators to sit up and pay closer attention to stable coins.

Peirce did not detail what this could mean, but that potential regulation should allow for a trial and error framework.