News reaching Ethereum World News indicate that controversial stable coin, Tether (USDT), has just minted a batch of tokens worth $250 Million on the 18th of this month. The stable coin has all along stated that all the tokens in circulation are backed by hard cash. This means that the circulating supply of 2,507,140,814 USDT is backed by a similar amount in cold currency.
When comparing the total supply of USDT with that earlier recorded in late April, we see a notable increment of over 200 Million tokens. On April 30th, the total supply was 2.61 Billion tokens. Checking coinmarketcap.com, this value is now 2.83 Billion USDT tokens; confirming an increment in the total supply.
Some of the controversies surrounding the Tether include:
- Links to the Bitfinex exchange and accusations of pumping and dumping of crypto in the exchange
- Lack of transparency in transactions and ‘uneasiness’ accepting external auditors
- Not enough cash reserves to back the said tokens in the markets
Whether the accusations are true of false is a matter of the observer of the events surrounding the token and the reader of this news. But one thing is for certain, the availability of a stable coin in the form of USDT in many exchanges such as HitBTC and Binance, has helped traders mitigate risks during times of market turmoil.
Stable coins are a welcome alternative to volatile prone cryptocurrencies such as Bitcoin and Ethereum; both of which pull down the rest of the crypto market when things are not doing so well. A seasoned trader simply trades to USDT as the market stabilizes.
This aspect of stability is also being explored by Bitmain and Circle to produce a stable cryptocurrency in line with Bitmain’s vision of establishing private central banks backed by cryptocurrencies. Bitmain is a Chinese, multi-million dollar cryptocurrency mining equipment manufacturer that led a $110 Million Series E funding round for Circle. The latter company is a blockchain-focused financial company.
The two entities will team up to create the said stable coin backed by a private central bank. When you consider how a national central bank works, its duty is to handle instances of inflation and deflation of the economy thereby ensuring stability in the prices of goods and services in a particular country as well as to promote economic growth.
Another stable coin yet to be released in the markets is Basecoin that also adopts the concept of a private central bank with an algorithm to guarantee it is pegged to 1 USD .