Tether is the largest stablecoin by supply and is currently facing a regulatory probe from the US Department of Justice for contending fallacious claims to banks with regards to the nature of its business.
The cryptocurrency market was somewhat unwavering on its stance on Tether or so it seemed. According to the statistics issued by Coindesk, Tether’s growth has completely stagnated.
The charts represent the growth of the largest stablecoins, Tether and USDC. Tether’s growth has completely leveled off since the end of May and its supply has been stuck at $64.3 billion. The statistics are surprising for Tether, the currency which had tripled from January to May end.
The main allegation tether is facing is that its currency is not backed by sufficient dollars and the issuers are supplying the currency without any support of the dollar. However, the news hadn’t largely affected traders and even with such allegations, Tether is still pegged to the dollar.
Comparing to USDC
Even though both currencies are stablecoins, Tether and USDC (USD Coins) are seen differently since USDC is more or less overseen by regulators. Also, it depends on how one Money Market Fund(MMF) is different from the other. USDC has continued to grow, albeit a bit slowly and sometimes stagnated as well.
Tether’s stagnation in supply might have something to do with investors not wanting to deal with Tether or trade-in offshore exchanges. These investors include professional and institutional investors who have a financial responsibility towards investors’ assets.
These situations highlight the difference between USDC and Tether. Their difference overpowers their similarities and hence makes their uses different. Even though offshore traders are now not so confident about Tether, it is unlikely that any other crypto assets will suffer such an impact. Tether might not hold the same importance as Lehman Bros. MMF did. However, what is does is highlight the systematic risks in crypto investments.