More Evidence Points to Tether's (USDT) Dollar Backing

A new Bloomberg report suggest that Tether Ltd may really have $1 for every USDT in circulation.

Published a few hours ago (Dec 18th) the report indicates that Bloomberg has documents in their possession that “offer more detail than has ever been made public”.

The documents were not shared and do not provide a complete overview of Tether’s finances. However, bank statements from four separate months reveal the amount of dollars held in Tether Ltd.’s accounts.

One statement demonstrates that on January 31, Tether held $2.2 billion in a bank account at Puerto Rico’s Noble Bank. This was exactly the same amount (2.2 billion) of USDT in circulation on that same day. The numbers also match up in both September and October of last year.

The bank statements however, do not show where the funds originated from nor their present location, as Tether Ltd. has worked with several different banks in its three-year history.

Bloomberg did not disclose who provided the documents but writes that it was someone with access to the company’s records. Bloomberg also affirms that the veracity of the documents was confirmed by a government official.

The Origins of the Tether Suspicions

Back in January, the U.S. Commodity Futures Trading Commission (CFTC) issued subpoenas to Tether Ltd. and Bitfinex, in order to determine if the companies claimed to have the necessary money to back the USDT’s in circulation. The investigation hasn’t yet produced any results and its status is as of the time of writing undetermined.

Following the subpoenas, many conspiracy theories started emerging, claiming that Tether might not have the funds it claims, and that USDT was involved in manipulating the price of bitcoin. The U.S. Justice Department is currently investigating whether the last bitcoin bull run to $20,000 was a consequence of unethical Tether trades.

Despite all the negative claims, having lost its peg by a considerable amount more than once, and the competition from several stable coins that have entered the market this year, Tether has remained somewhat resilient. In fact, just yesterday Tether briefly surpassed Stellar (XLM) as the 4th largest cryptocurrency.

G7: Facebook's Libra Shouldn't Be Launched Until Its Risks Are 'Adequately Addressed'

A report from the Group of Seven Nations (G7) has revealed some of the world’s biggest economies believe Facebook’s cryptocurrency Libra shouldn’t be launched until its potential risks as “adequately addressed.”

The report, seen by the BBC, reportedly outlines major risks posed by cryptocurrencies like Libra, and notes its backers must be legally sound, protect consumers, and make sure the cryptocurrency isn’t used to fund terrorism or launder money.

According to the BBC it doesn’t single out Libra itself, but instead refers to “global stablecoins” with the potential to “scale rapidly.” Some of the outlined risks include a potential threat to financial stability of users suffer from a sudden “loss of confidence in Libra,” as well as being a threat to policymakers’ measures.

The report, which is set to be presented to finance ministers at the IMF annual meeting, reads:

The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed

The document further adds that even if the Libra Association manages to mitigate the risks listed in it, this still doesn’t guarantee “regulatory approval for a stablecoin arrangement.” JP Morgan’s JPM stablecoin is reportedly also going to be examined.

In a separate document the Financial Stability Board (FSB), which coordinates rules for G20, noted stablecoins like Libra pose various challenges to financial stability and investor protection, among others.

In the document Randal Quarles, the chairman of the FSB, said these challenges should be “assessed and addressed as a matter of priority.” The BBC’s report comes shortly after Mastercard, Visa, and eBay join PayPal in leaving the Libra Association.

David Marcus, Facebook's executive leading the stablecoin project, rated to the news on social media:

 

 

Notably, the G7 report also acknowledges cryptocurrencies can potentially provide a faster and cheaper way to move money, as the current system can be “slow, expensive and opaque.” The first Libra Association board meeting is set to take place in Geneva on Monday.

Featured image via Pixabay.