Tether in the Spotlight After USD 9B Worth of Redemptions

The popular stablecoin tether (USDT) is again the subject of unwanted attention after approximately USD 9bn has been redeemed for US dollars by users in the aftermath of the terraUSD (UST) collapse.

The redemptions have come despite USDT trading on exchanges within a rounding error of its USD 1 peg. At the time of writing (08:39 UTC), the stablecoin traded at USD 0.9989 according to coin tracking site CoinMarketCap, and USD 0.99917 per CoinGecko.

Tether price in May:

Source: coinmarketcap.com

Still, it appears users have remained nervous since the collapse of UST, the Terra (LUNA) network’s algorithmic stablecoin. And given that tether for years has been the subject of rumors that the stablecoin may not be fully backed, the nervousness among users was quick to hit that particular stablecoin in the days after UST’s troubles started on May 9.

Commenting on the situation on Wednesday this week, Jim Bianco, president of the investment analysis firm Bianco Research, pointed out that a tether liquidity pool on the Curve (CRV) decentralized finance (DeFi) platform remains unbalanced.

“Not enough for it to break the peg, but enough that Tether consistently stays in the southside of USD 1.00 (0.998 or so) and DAI/USDC consistently stay on the northside of USD 1.00 (USD 1.002 or so),” the analyst wrote.

“Not enough for it to break the peg, but enough that Tether consistently stays in the southside of USD 1.00 (0.998 or so) and DAI/USDC consistently stay on the northside of USD 1.00 (USD 1.002 or so),” the analyst wrote.