On the 4th of December, tether’s supply increased to about $76 billion as an additional 3 billion dollars worth of the coin was minted in the past two weeks. Over one-third of these newly minted coins were mined on the Tron Network. Tether minted out about $3 billion USDT in the early days of November, and current minting estimates its circulating supply to be almost twice ($76 billion) that of USDC (USD Coin), which is currently estimated to be about $39 billion.
Tether Faces Scrutiny About Its Backing
Despite criticism from industry experts about tether’s lack of cash to completely support its reserves, the coin was still able to achieve this feat. According to the Financial Times report, only about 2.9% of Tether’s USDT is entirely backed by dollar reserves.
Questions have been raised over the years about the legitimacy of the backing of the USDT both from lawmakers and the crypto community in general. Tether has constantly debunked those suggestions and has taken further steps to become more transparent to the community.
In light of Tether’s backing, an independent platform called Hiddenburgh Research has launched a Hiddenburgh Tether Bounty Program, which was established to reward individual findings related to Tether backing. The program boasts rewards of up to $1 million.
Although, due to the continuous emergence of stablecoins, it has risen to prominence among concerns for lawmakers all around the globe. It is gradually becoming a humongous task for Tether to win them over. Tether’s reserves will become a key talking point on the ground that stable coins become regulated.
Tether’s Transparency Issues
Recently, the Commodity Trading Futures Commission fined Tether about $41 million. Even with the upgraded effort by Tether to step up its transparency, it is still regularly faced with criticisms from regulators and the entire crypto community. Although in recent months, the company has taken sufficient steps to minimalize crossing paths with the regulators greatly.
Despite all these steps geared towards improving their transparency, Tether’s actions have also attracted the attention of lawmakers, and even the US Senate Banking Committee Chairman issued a letter to Tether’s CEO Jean-Louis van der Velde about a week ago. Although no follow-up surfaced until Dec 3, the Chairman expects a response from the CEO due to concerns about Stable coin.
In light of the lawmaker’s views, Tether responded and made it clear that they will make an effort to collaborate with lawmakers to address issues concerning stable coins. Tether’s response came as no surprise to anyone, given their position in the stablecoin market and their disputable transaction history.
Many other stablecoins have also taken steps to improve their transparency and accountability. Earlier this year, the USDC issuer circle announced steps towards improving its transparency.