Wait, What? Tether Claims $1.6 Billion In Reserve Funds
You’d think that having your own currency in circulation should be enough of a reserve fund. But apparently, Tether just isn’t satisfied with that. The stablecoin provider just announced that it had $1.6 billion in excess reserves to back up its stablecoin.
But Why So Much ‘Excess’ Money?
Maybe the folks at Tether just like the sound of the word excess; or perhaps they knew they weren’t going to need that much money. Let’s be honest here—this is a lot of money. So why do they need it?
Well, according to Tether CEO Paolo Ardoino, they need it to back up their stablecoin, USDT. They want to offer this as a reliable form of currency and as a way to achieve price stability in the cryptocurrency market. This reserve fund will make sure that more money won’t be printed, thus avoiding inflation.
So What Does This Mean for Tether and the Crypto Market?
Basically, it means that Tether is serious about making its crypto currency reliable. They have a real fight on their hands—other companies are already competing with stablecoins, and people don’t just trust any currency. Tether’s decision to build up a reserve fund is a big sign that it means business—and that it’s willing to go the extra mile to ensure users’ trust.
As for the impact on the cryptocurrency market, it’s hard to say. Tether’s claim that its stablecoin could bring price stability is a bit of a stretch—but if the market remains volatile, then perhaps the extra reserves can help smooth out some bumps.
Unless you’re a fan of the show Who Wants To Be A Millionaire?, $1.6 billion might sound like a lot of money. But if you’re Tether, it’s just another sign that you’re serious about making your own currency work. It just goes to show that in the world of cryptocurrency, you need to think big—which, in this case, means thinking in billions.
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