What cryptocurrency is the most widely used in the world? If you think that it is the Bitcoin, this is not necessarily the case. The Bitcoin represents nearly 70% of the stock market value total world of digital assets. However, in the terms of trade daily and monthly this is not at all the first cryptocurrency which arrives in the head, but tether, with a market capitalization more than 30 times less than the Bitcoin, reports the news agency Bloomberg. The transactions of tether, have exceeded for the first time the index of Bitcoin in April, and from the beginning of August, he consistently exceeds approximately $21 billion per day. The absolute record was established in May 2018, when the USDT (token of the tether cryptocurrency) has reached a record high rotation of 31 billion dollars in one day, writing the information site Vestifinance.
Given that the monthly rotation of tether is approximately 18% greater than the Bitcoin is probably the most important currency in the crypto-ecosystem.
Tether is also one of the main reasons for which the regulators are wary of cryptocurrency and have slowed down the decision concerning the exchange-traded funds (ETF) by fear of manipulation of the market. Tether is a stable corner, a token whose value is attached to a trust instrument stable. The currency is a bridge to connect the values of the assets of blockchain volatile in the world of the instrument’s trustees more stable. Among the negative aspects of the use of USDT, it should be noted the refusal of the issuer to make an audit and to check for the presence of required reserves, as well as the opacity of the issuance of new tokens.
The presence in the structure of the Protocol of USDT a centralized transmitter is a point of failure and creates serious risks for the users. To After Allaire, the Asian operators represent nearly 70% of the crypto-trading, while tether, has been used in 40% and 80% of all transactions on the two largest global awards, Binance and Huobi, respectively, reported Coin metrics at the beginning of the year. “Some do not suspect not even they use a tether, said Thaddeus Dryja, a researcher at the Massachusetts Institute of Technology (MIT). Given that the traditional financial institutions are concerned not to be effective enough to identify criminals and money launderers, most of the services of the exchange of cryptocurrency do not yet have bank accounts and cannot place funds on behalf of their clients. That is why they use tether as a substitute.
” “I do not think that the people trust to tether: I think that the people use tether, without the suspect, in thinking that they have real money on their bank account. Some scholarships identify differently their pages to give the impression that the clients hold their money in dollars, and not in tether”, says the expert. The management and control of tether, give rise to many questions. While the Bitcoin belongs to no one, a tether is issued by a private company in Hong Kong whose owners also have the service of Exchange Bitfinex cryptologic.
The exact mechanism of increase and decrease in emissions of the tether is unknown.
As well as the extent to which the reserves are covered by reserves trustees, in the absence of independent audit of tether. In April, the chief counsel of the company tether, Limited, Stuart Hoegner, has confirmed that the STABLE USDT corner was assured by reservations trustees to a height of 74%, then that he had spoken earlier of a reserve of 100%. On 27 February, tether has made furtively changes to the warranty policy of token USDT. From this date, each currency was covered by “reservations which include the traditional currency and the equivalents of cash, as well as, from time to time, other assets and the estimated revenue of the loans granted by a tether to third parties”. The disclosure of the information was held in the framework of the investigation conducted by the public prosecutor in New York, which has accused Bitfinex, after losses of $850 million, the have hidden using the reserves of Tether for cover the injury.
According to the forces of the Order, the operator of the commercial platform iFinex Inc. has borrowed at least 700 million dollars for the deficit, but users have not been informed.
John Griffin, professor at the faculty of finance from the University of Texas at Austin, thinks that half of the increase of the Bitcoin in 2017 was caused by a manipulation of the market with the help of tether. Last year, Bloomberg has announced that the U.S. Department of Justice is considering the role of tether in this manipulation of the market. “The presence under the control of centralized forces destroyed all the initial vocation of the blockchain and cryptocurrency decentralized. Thus, even if in itself the idea of a stable corner is good in theory, in practice it is risky, subject to abuse and suffers from problems similar to the fiduciary currencies traditional”, said John Griffin. It has been reported recently that tether, had issued a stable coin attached to the Chinese yuan offshore (CNH): “The CNH is added to the basket of currencies compatible, there is already the new stable CNH corner! It is attached to the CNH and is available on the Ethereum blockchain as a token of the standard ERC-20.”
Earlier, Zhao Dong, investor of the Bourse Bitfinex had stated that the launch of CNH should not lead to conflict with the Central Bank of China. “The CNH will not be an obstacle to the control of the movement of capital exercised by the People’s Bank of China. The CNH distinguishes itself from the CNY because it is already a product offshore. On the contrary, the CNH will help China to broaden the introduction of CNH in the international regulations,” concludes the investor.