The USDT issuer company finally talked about the ongoing negative discussion about the USDT reserves.
USDT is a first-ranked stablecoin in the crypto market and also it was the first stablecoin that came to light with a concept to make the funds flow easy in the crypto ecosystem. Since May 2022, after the collapse of TerraUSD stablecoin, many people & rival companies have been criticising this company and claiming that USDT may collapse badly because the company is holding several commercial papers. In short, critics claim USDT issuer Tether uses reserves to give easy loans to big companies, which is not a safe thing for USDT users.
On 13 December, Tether published a dedicated blog post against the spreading FUDs against the USDT reserves FUDs and said that it will reduce its loan to zero in 2023.
This month, a WSJ report claimed that released loans by Tether were very risky and also claimed that during a high USDT sale situation Tether will not be able to redeem & pay back to users.
In response to this information, Tether company explained that Tether uses USDT reserved funds more likely to banks and only provides loans against secured collateral.
This is not the first time when Tether was facing significant heat in the crypto sector. Earlier in August of this year, when USDT plunged by 3% from its $1 pegged value, the company faced huge criticism.
At that time, Tether officials claimed that some rival companies were trying to attack the USDT but the company was able to handle the situation because it was holding a significant amount of reserves to manage critical situations.
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Tether pledges it will reduce secured loans to zero in 2023