The collapse of crypto Luna and its associated terraUSD stablecoin was truly unexpected. while many of us UST were unaware before, and what the stablecoin actually represents. It’s a big deal as billions of dollars in crypto wealth has been vaporized by its shockwaves throughout the market.

Looking at the chart of the Cryptocurrency market today, it looks unsure in every possible direction. As Bitcoin and ether are at their lowest point since 2020, altcoins, dogecoin and Cardano are falling even worse.

Virtual currency volatility and stormy economic conditions are affecting not only cryptocurrencies, but also the stock market. This unprecedented dip is really painful for crypto investors.

The founding partner of ANT Capital, Jun Yu, tweeted about the risk associated with USDT yet and cannot redeem USDT 100%. The collapse of USDT due to a run is really small. According to a recent report, Tether currently has more equity than debt, the value of the reserves is greater than the market value of the issued stablecoin.

Tether currently has assets worth $82.4 billion and liabilities worth $82.2 billion. Although Tether’s assets are greater than its liabilities on the books, it did not take liquidity risk into account when valuing its assets and making allowances for expected confidence losses and dividing its assets. And it is impossible to eliminate these risks even after training.

Furthermore, a recent audit report states that 85.64% of Tether assets have relatively good quality liquidity. The proportion of cash is still low, accounting for less than 5%, and more are US Treasury bills, which is almost 47.56%, commercial paper, commercial paper certificates of deposit, foreign exchange funds , etc. And another 14.36% of assets are from other investments, corporate bonds, funds, precious metals and secured loans.

taking into account the safety factor of these assets of 85.64% is still doubtful. Cash, US Treasury bills, and money funds are relatively safe, but commercial paper and certificates of deposit have more security to worry about. They continue to be associated with liquidity risk and default risk, despite the fact that they have 44 days to maturity with an average rating of A-1.

The remaining 14.36% of Tether assets fluctuate more, and more than 60% of Tether assets have good quality and are realized in a short time to meet redemption demands.

However, many small coin owners do not even have US dollar accounts and thether assets will not be able to redeem all stablecoins in full. Therefore, it is impossible to redeem USDT at 100%.

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