Tether's Reserve Shrunk By $16 Billion As Crypto Market Dips


Tether's reserves have shrunk by $16 billion as the cryptocurrency market has declined in recent months. The largest stablecoin by market capitalization had reserves of approximately $82.4 billion at the end of March, which had decreased to approximately $66.4 billion at the end of June.


According to Reuters, Tether has hired the Italian accounting firm BDO Italia to verify its reserves. By the end of this year, the goal is to publish monthly reports instead of quarterly reports for this stablecoin. Tether claims to maintain value through dollar-denominated returns. The cryptocurrency market is concerned about these reserves. That's why, a few months ago, the crypto market experienced a sell-off following the sharp drop in the stablecoin TerraUSD.


Several countries' financial regulators have warned that stablecoins may endanger financial stability. Tether's Chief Technology Officer Paolo Ardoino reported about two months ago that Tether had processed approximately $16 billion in redemptions. Due to the crypto market's collapse, a large number of investors converted their Tether holdings back into dollars.


Stablecoins are cryptocurrencies that attempt to tie their market value to a reserve asset, such as gold or common currencies. These are more commonly used in digital transactions involving the conversion of virtual assets into physical assets. Binance, USD Coin, and Tether USD are two popular stablecoins that are linked to the US dollar.


Stablecoin, a rapidly growing cryptocurrency, has emerged as a significant medium of exchange. Traders frequently use it to transfer funds. It is simple to convert major stablecoins into bitcoin or other cryptocurrencies. The recent drop in stablecoins has taken a heavy toll on investors. Stablecoin issuers in the United States will face bank-like regulations and oversight.


A draft bill related to this is being prepared. Firms associated with stablecoins are also being scrutinised in some other countries.