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.

Neutral Dollar Stablecoin Founder Explains How to Access Shared Liquidity Pools

Matthew Branton, the Founder and Chief Technology Officer at Neutral, a smart contract-enabled platform that provides various financial instruments for the cryptocurrency industry, has predicted that stablecoins will have “a tremendous impact on the future economy.”

Branton, a computer science graduate from Lafayette College, told CryptoGlobe that stablecoins offer “access to a digital currency that can enable payments, credit, and banking services which many people don't have access to.”

According to Branton:

[Stablecoins are] innovative digital assets [that] will help lower the barriers for [major financial] applications and [they will also] help people transact in value [systems] they are familiar with, such as the USD [and other fiat currencies.]

“Cultivating Healthy Dialogue to Help Build Wider Understanding” of Stablecoin Market

In response to a question about how the traditional financial system could be upgraded (in terms of both the regulatory framework and technological infrastructure) so that it can allow users to legally acquire stablecoins and other digital assets, Branton remarked:

In order to ensure that regulation evolves in tandem with advances in financial technology (FinTech), dialogue between regulators and innovators is essential. Cultivating a healthy dialogue among fintech project [developers], stakeholders and regulators of traditional finance will help build wider understanding of the benefits of stablecoins, and in turn accelerate the creation of regulation and infrastructure that accommodates stablecoins in the global economy.

Neutral Dollar Aims to Provide “Diversified Exposure” to Investors at “Lower Risk”

When asked what unique value proposition the Neutral Dollar stablecoin offers, which may not currently be available in the cryptoasset market, and how this is supposed to be relevant and useful, Branton said:

The Neutral dollar provides diversified exposure, presenting a lower risk alternative against other stablecoins (which contrary to their name, may not exhibit stability) in the market. In addition, the Neutral Dollar functions in a way that creates an additional layer that allows for shared liquidity amongst constituents stablecoins, a property that isn't inherent in their design. Given the fragmented and nascent nature of the crypto market structure right now, this solution is particularly relevant and unique in the marketplace.

Responding to a question about the potential impact he expects his company’s line of products to have on the cryptoasset market, Branton stated:

The impact of our products is to not only give end-users a better means to invest, trade, or hedge cryptoassets, but to also facilitate liquidity and engage in better portfolio management practices through our products. In order for the digital asset space to reach its full potential, the industry needs reliable financial instruments that take us beyond the limitations of fiat currencies, while also upholding the highest standards in stability and transparency. In the longer term, we plan to explore the launch of a suite of financial products to improve market infrastructure and activity.

Digital Asset Security Is “Quite Solid”

Commenting on how we can ensure the security of our assets, including stablecoins users might acquire, since the technology used to transact in these assets is highly technical, Branton noted:

Given that collateral is on-chain and smart contract based, security is decentralized in nature and quite solid. Asset safety is still the responsibility of the end-user — crypto-storage extends beyond the case of stablecoins and Neutral Dollar itself.

He added: “Ultimately, once a Neutral Dollar token is deployed on smart contract networks, it will function completely autonomously. The math and algorithms that govern its operation will operate independently of a centralized entity and in a transparent manner, and provide continuous services on the network.”