Since its launch, Tether has maintained that its USDT stablecoin is 100% fiat backed. Now, this is changing with Tether saying that it may use other ‘assets’ to fully back the USDT stablecoins in circulation.
The change has been captured on Tether’s official website which has since scrapped the old statement that the USDT stablecoin is only pegged to the U.S dollar at a 1:1 ratio.
The new statement on the website reads:
Every tether [USDT stablecoin] is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.
The current statement is in contrast with the previous statement which indicated that the USDT stablecoin “is always backed 1:1” by traditional currency held in reserves. “So 1 USDT is always equivalent to 1 USD.”
The change on whether USDT is 1:1 backed by fiat reserves comes after a long battle with questions on whether the close to 2 billion available USDT stablecoins actually have corresponding fiat reserves.
The controversy around the USDT stablecoin backing was once cooled down by a report by Bloomberg indicating that the bank statements from Tether show USDT had enough reserves in four separate months.
Although other stablecoins in the market today provide scheduled reports regarding their fiat backing, Tether has been adamant to divulged such information or to allow for a full review of its fiat reserves by a third party audit firm.
Apart from failing to produce such reports, Tether has been accused by researchers of toying around with the price of Bitcoin with help from Bitfinex, a cryptocurrency exchange.
Do you think the change is a sign Tether may allow a full independent audit of its reserves used to back the USDT stablecoin?
Let us know your thoughts in the comments section below.