Tether’s USDT Stablecoin Discount Widens Amidst Rapid Growth and Regulatory Cooperation

Tether’s USDT stablecoin is experiencing a considerable discount on centralized exchanges like Binance and Coinbase, marking its widest gap since July, according to data from Kaiko, a crypto data provider based in Paris. This comes following Tether’s recent disclosure of extensive collaboration with U.S. authorities.

CryptoSlate’s data confirms this discrepancy, indicating the USDT stablecoin is currently trading at $0.99911. Major platforms like Coinbase, Kraken, and Binance exhibit this discount, but notably, Bitfinex, owned by Tether’s parent company, iFinex Inc., doesn’t show the same markdown.

The cause of these discounts remains unknown, although Tether has previously suggested that market-making issues often drive such price differences across crypto exchanges.

Tether’s Unprecedented Growth

The present markdown in Tether’s value contrasts with its rapid expansion this year. With a market cap surpassing $90 billion and a dominant 70% share among stablecoins pegged to the U.S. dollar, Tether has been one of the fastest-growing stablecoins. It has minted over $23 billion worth of new tokens in 2023 alone, equivalent to the total market cap of its primary competitor, Circle’s USD Coin (USDC).

While some experts see Tether’s growth as a sign of its robust foundation, others are skeptical, questioning the sustainability of its trajectory.

Tether’s Collaboration with Authorities

Tether’s recent revelations about cooperating extensively with U.S. authorities have faced substantial criticism within the crypto community.

Reportedly, Tether froze 326 wallets holding $435 million of its stablecoin for entities such as the U.S. Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Secret Service. According to Tether, these actions were to aid law enforcement agencies in combating illicit use of stablecoins.

Following this news, Checkmate, lead on-chain analyst at Glassnode, likened Tether to a Central Bank Digital Currency (CBDC). Other crypto figures, like Cardano’s Charles Hoskinson, expressed surprise at Tether’s actions.


Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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