Stablecoin Tether, which has been at the center of an ongoing controversy involving Bitfinex and market manipulation, has been gaining popularity with gambling websites and marijuana shops.
According to a report by Bloomberg on Oct. 25, Tether’s USDT has been gaining substantial ground in the world of transactions. Crypto payment processor CoinPayments.net says that USDT accounts for 30% of its volume, up more than 3000% from a year ago.
Ievgen Iugrinov, product manager at Moscow-based B2BinPay, told Bloomberg USDT-based transactions have grown to 20% of the company’s total volume, doubling since 2018.
While Tether has created controversy over its exact value-backing, the USDT coin is supposed to be pegged 1:1 with the US dollar, thereby giving customers and merchants a stable asset for transactions.
Sean Mackay, operations lead at CoinPayments, explained the appeal of USDT,
Merchants used to accept Bitcoin, Ethereum, Ripple and convert it into Tether in order to hedge against the volatility. Now we are seeing the payments just being done directly in Tether.
The Bloomberg report claims that Tether has gained popularity with merchants having difficulty obtaining credit-card processing services, such as online gambling sites and cannabis shops. Tether allows these merchants to bypass the high processing fees of dealing with a traditional bank.
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