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Tether
Tether

Tether’s Circulating Supply Drops by $7 Billion

After the collapse of UST and other stablecoins, USDT suffered a massive drop in its overall circulating supply. Tether suffered a slump in the asset’s circulating supply after investors pulled over $7 billion from it.

Investors Losing Confidence In Stablecoins

According to the latest data, it is stated that the circulating supply of USDT is currently $75.9 billion. That value was $83 billion last week.

While USDT has regained dollar parity on trading platforms, investors seem to have lost some confidence after a $7 billion pullback from the stablecoin.

Ki Young Ju, CEO of CryptoQuant, asked Tether chief technology officer Paolo Ardoino if the $75 billion in circulation was backed.

Stablecoin
Tether

Ardoino said:

We recovered 7B in 48 hours in the blink of an eye. How many institutions can do the same? We can go ahead if the market wants, we have all the liquidity to deal with big redemptions and we can pay them all 1-for-1. Yes, Tether is fully backed.

Tether’s stablecoin reserve has been criticized by arguments over whether the USDT is truly backed to 1:1 USD. Meanwhile, the company has been reducing the amount of commercial paper that supports USDT in the past six months.

The last drop occurred in early May. Ardoino stated that most of the firm’s reserves are in the US Treasuries.

USDT was trading below (and above) its fixed price of $1 on various exchanges as a result of certain market dynamics. This has created arbitrage opportunities where users can buy cheaper on one platform and sell for profit on another platform.

More Stablecoins Depeg After Terra’s UST

CryptoQuant CEO also asked Tether CTO when the company will provide an audit for USDT. “I hope regulators will force more audit firms to be more crypto-friendly,” Ardoino said, noting that the firm is working on an audit.

Following the UST price drop, other stablecoins also dropped their stable prices. Phantom USD and Dei were depp. The DeFi protocol has been a pretty big loss for Scream.

Failed to adjust fUSD and DEI prices. This error caused $35 million in debt. Cream said it was working on a solution, noting that the Phantom Foundation plans to run a liquidation bot to fix the problem.

Scream will fix the platform’s fUSD at $0.81. But that could create more problems as fUSD drops to $0.74.

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About Hama Amefiz

Amefiz is a professional blockchain, cryptocurrency and tech journalist, regular contributor to newsbsc.com who is writing analysis about the latest developments in the cryptocurrency and blockchain space.

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