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CATEGORY: tether stablecoin


Aug 01, 2023 02:25

Tether Stablecoin Reserves reach a Market Cap Record of $86.5 billion in Q2

Tether, a significant player in the stablecoin market, has recently announced that its reserves have reached an all-time high.

Mar 23, 2022 07:05

Top 5 Biggest Stablecoins by Market Capitalization in 2022

Stablecoins are an extremely interesting group of cryptocurrencies that are playing an enormously important role with the increasing institutional adoption of cryptocurrencies. They protect investors with a stable exchange rate against FIAT currencies. Their importance should continue to increase in the future. 

If you are not yet familiar with this type of cryptocurrency, you should do so to understand the functions of the main stablecoins. We provide a top 5 guide that will tell you about the major stablecoins in the market. 

What are stablecoins?

Stablecoins are digital currencies whose price is tied 1 to 1 to another financial asset. The most popular of these coins are pegged to the US dollar. This gives investors in crypto assets the opportunity to convert their money into a more useful form in a market that is highly volatile. Before the introduction, converting FIAT money into cryptocurrencies was much more difficult. 

How do Stablecoins work?

When it comes to stablecoins pegged to the US dollar, there are 3 different types of stablecoins:

  • Stablecoins with Collateral: With this type of stablecoin, each individual coin is backed by an asset. For example, a financial organization can hold a US dollar equivalent for each coin (Example: Tether, USD Coin, Binance USD).
  • Algorithmic stablecoins: These coins use certain blockchain-based mechanisms to keep the price of the coins constant (example: TerraUSD).
  • Collateralized stablecoins: This uses smart contracts to tie up other crypto assets as collateral for loans. From these loans, programs generate new coins (example: Dai).
What are the top 5 stablecoins? #1 Tether (USDT)

Tether was originally launched as a real coin in 2014. It is the largest and most well-known stablecoin on the market. Tether has a market cap of $80.88 billion, making it the 4th largest cryptocurrency. It is available on 400+ crypto exchanges.

Despite its excellent functionality and status as a market leader, Ether has recently come under fire as the company has repeatedly denied investigations and had to pay fines for criminal activities in the US. Despite these difficulties, Ether has performed excellently as a stablecoin since its inception.

#2 USD Coin (USDC)

The USD coin was introduced by the Coinbase exchange in 2018 . USDC is now the second largest stablecoin with a market cap of $52.6 billion. This puts him in 5th place behind Tether at Coinmarketcap.

The USDC is available on almost 300 exchanges and works extensively with financial institutions and regulators. Unlike Tether, monthly investigations take place at the USDC.

#3 Binance USD (BUSD)

After Coinbase launched USD Coin, the world's largest crypto exchange Binance followed soon in 2019 when it launched its own stablecoin. The market capitalization is 17.66 billion US dollars. This makes BUSD number 12 on Coinmarketcap. BUSD is only available on just over 100 exchanges but benefits from powerhouse Binance.

Binance users benefit from 0% transaction fees on BUSD. Furthermore, they can earn an income of up to 15% per year through lending. Among the top 3 stablecoins, BUSD is the only one allowed by WallStreet regulators.

4. Terra USD (TUSD)

The Terra USD is the most recently launched and the fastest-growing stablecoin among this selection. The launch took place in September 202 on the Terra Blockchain. Right now, the algorithmic stablecoin is #4 among stablecoins and #14 overall, with a $15.68 billion market cap. 

The Terra USD is kept stable by algorithms on the Terra Blockchain. It is a true decentralized stablecoin, unlike the top 3, as it is not backed by equivalents held centrally. Investors can earn up to 20% annual returns on TUSD using the Terra Anchor Protocol. You can find more information about Terra in this article. 

5. Dai (DAI)

Dai is the most popular collateralized stablecoin. At $9.92 billion, DAI ranks 19th among all cryptos by market cap. The Dai is available on over 200 exchanges. 

The Dai is the product of the Maker Protocol, a decentralized application based on the Ethereum blockchain. The DAI uses smart contract to bind other crypto assets like Ethereum and generate new stablecoins through this security. 

Are Stablecoins a Good Investment?

You can buy stablecoins if you want to start with cryptocurrencies but are afraid of the high volatility first or want to get to know the processes first. However, of course, they do not bring in any income, since their value is stable against the US dollar. 

You can make money from stablecoins over the long term, but it's just a slightly riskier alternative to a savings account. A diversified portfolio with "regular" cryptocurrencies is a better choice.

What are the risks of stablecoins?

Since stablecoins have a "stable" price, they are generally considered the safest form of investment among cryptocurrencies. However, as an investor, you should know that stablecoins are typically highly centralized compared to "real" cryptocurrencies, which are completely decentralized. Tether, USD Coin, and Binance USD are all wholly owned by their parent companies. 

The financial organizations that issue stablecoins accumulate power and money similar to normal banks, but without having to follow the normal regulations in the classical financial market. In recent years, the market capitalization of all coins has increased massively in a short time. As these types of cryptocurrencies become more and more involved in traditional financial markets, calls for more regulation are getting louder. They are also more vulnerable to a financial crash.

Concepts like the Terra USD are therefore becoming increasingly popular. The decentralized aspect of cryptocurrencies can also be used with stablecoins. However, this new form still offers the important price stability. 

stablecoin© Cryptoticker

Oct 31, 2021 02:30

What is Tether USDT and Why should you care about its Traded Volume?

When most people hear the term "Cryptocurrency", they often associate it with highly volatile and risky digital assets. This is true for cryptocurrency, but not for stablecoins. Tether is one example of a cryptocurrency that acts as a stablecoin. Its value has always been pegged to the US Dollar. In this article, we're going to go back to the basics and explain what is Tether USDT, and why it might be a good idea to track its volumes traded.

What is Tether USDT?

Tether is a company that releases stablecoins backed by the US Dollar, Gold, and the Euro. Tether is mostly known for its USDT stablecoin, which is by far the most liquid and well-established stablecoin. According to Tether, the USDT is backed by a basket of assets, made up predominantly of US Dollars. The company is often involved in controversies, mostly involving the transparency of its backing of the USDT.

Despite those controversies, Tether claims that it converts cash into digital currency. This is made to anchor its value to the price of national currencies like the US dollar, the Euro, and the offshore Chinese yuan. They also claim that every Tether token is always 100% backed by their currency reserves. This includes traditional currency and cash equivalents and may include other assets and receivables from loans made by Tether to third parties. Every Tether token is also 1-to-1 pegged to the dollar, so 1 USD? Token is always valued by Tether at 1 USD.

Why does Tether have Legal Controversies?

The CFTC recently fined Tether “for making untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin”.

Tether, since its inception in 2014, has claimed that its USDT tokens are backed 1:1 by the USD and Euros. But, the company misrepresented these claims from Jun 01, 2016, to Feb 25, 2019, by changing the wording to “equivalent amount of corresponding fiat currency” held by Tether and “safely deposited” in Tether’s bank accounts. CFTC found that these claims weren’t true. Also, Tether wasn’t backed for most of the time.

Should you Buy Tether USDT?

Since USDT is pegged to the United States Dollar, this means that capital appreciation can't be achieved. You won't make any money, nor lose any by simply holding this token. On the other hand, holding USDT has a great benefit in the current volatile crypto markets.

Because USDT is pegged and its value doesn't change, this can be a great way to hedge the market's price fluctuation during tough crypto price swings. Instead of holding your cryptos through falling markets and watching your crypto portfolio decrease, swapping to USDT can help keep your gains or stop you from losing.

For example, assume you have USD 1,000 worth of Bitcoins. If Bitcoin's value is decreasing, your portfolio will definitely fall as well. Swapping to USDT will keep your portfolio's worth to USD 1,000 (of course, minus the fees of swapping).

Why Should you Always Track USDT's Volatility?

Whenever the crypto market crashes, most crypto traders and investors tend to swap to USDT to hedge the decreasing prices. That's why stablecoins' volumes increase during such events. Those crypto traders are waiting for the crash to end, to buy back their favorite cryptos.

With Tether being the biggest stablecoin by market cap, its traded volume is a good indicator for crypto market trends. When the crypto market is crashing, its volume traded increases and the market cap as well. On the other hand, when the crypto markets are up, its market cap decreases, and volumes become lower.

How to Buy Tether USDT?

Most crypto exchanges offer Tether USDT as a cryptocurrency. We at CryptoTicker recommend the following exchanges, as they proved to be solid companies:

tether cftc fines© Cryptoticker

The post What is Tether USDT and Why should you care about its Traded Volume? appeared first on CryptoTicker.

Oct 16, 2021 02:30

Tether To Pay $42.5M Fines Over Claims That USDT Is Backed By A Dollar Each

Tether and Bitfinex - the issuers of the highly popular cryptocurrency USDT stablecoin have agreed to pay $42.5M in fines to the Commodity Futures Trading Commission (CFTC) for false claims that the Tether Stablecoin was fully backed by US Dollars and over execution of illegal transactions while operating Bitfinex cryptocurrency trading platform, a CFTC press release on Oct 15 said. The stablecoin Tether - the largest by numbers issued and usage has long been criticized for the claim that it's USDT is backed 1:1 by the United States Dollars (USD).

https://twitter.com/CFTC/status/1449032826020634624

The Commodity Futures Trading Commission (CFTC) is an American agency responsible for regulating U.S. derivatives markets including futures, swaps and certain options. This is the first that the CFTC has applied the definition of commodities to include stablecoins. However, the Commissioner reiterated that the agency doesn't regulate stablecoins and public shouldn't have any false sense of comfort that CFTC is overseeing the stablecoin business.

The settlement with the Tether respondents finds that there were misrepresentations regarding the assets backing tether, specifically that the USDt tokens were backed 1-to-1 by US dollars.  The evidence establishes that this assurance provided to tether customers was not 100% true, 100% of the time.  When reviewing this record, it is clear to me that wrongdoing occurred, and that someone should be held accountable.  For all of these reasons, I concur in the Commission’s acceptance of the Tether respondents’ offers of settlement.

Commissioner Dawn D. Stump Over CFTC Decision

CFTC has fined Tether for "for making untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin" and Bitfinex for finding that it "engaged in illegal, off-exchange retail commodity transactions in digital assets with U.S persons on the Bitfinex trading platform and operated as a futures commission merchant (FCM) without registering as required".

Tether, since it's inception in 2014, has claimed that it's USDT tokens are backed 1:1 by the USD and Euros. But, the company misrepresented these claims from Jun 01, 2016 to Feb 25, 2019 by changing the wording to "equivalent amount of corresponding fiat currency” held by Tether and “safely deposited” in Tether’s bank accounts. CFTC found that these claims weren't true and Tether wasn't "fully backed" for most of the time.

https://twitter.com/BennettTomlin/status/1449027303418306564

The agency also noted in it's verdict that Tether failed to disclose that its reserves included unsecured receivable and non-fiat assets and that the blockchain company failed to carry out routine professional audits of its reserves backing. CFTC press release mentions that Tether held FIAT reserves for only 27.6% of the days in a 26 month sample time from 2016-2018 and the company relied on unregulated entities and shady third parties to hold funds, instead of holding them itself.

Tether hasn't concluded any proper audit of its reserves until now and the last audit was found to be manipulated by the CFTC as the company selected the date in advance and transferred funds beforehand to paint a false picture of 1:1 backing. While the matter is closed for now with the CFTC, Tether's reputation as a credible and reliable stablecoin issuer has come under fire. The red flags that were previously raised by the critics have basically been confirmed.

tether cftc fines© Cryptoticker

The post Tether To Pay $42.5M Fines Over Claims That USDT Is Backed By A Dollar Each appeared first on CryptoTicker.

Apr 17, 2023 10:30

Tether Stablecoin Sees 22% Growth in 2023 Despite Dollar-Pegged Token Economy’s Contraction

Since January 2023, the number of tether stablecoins in circulation has grown from 66 billion to the current 80.9 billion, representing growth of more than 22% this year. Tether’s growth is approaching the high of $83 billion in stablecoins in circulation that the project saw almost a year ago, in May 2022. Tether Supply Is [...]

The post Tether Stablecoin Sees 22% Growth in 2023 Despite Dollar-Pegged Token Economy’s Contraction appeared first on Crypto Breaking News.

Aug 06, 2023 07:05

Tether WINS Lawsuit: Judge Dismisses Class Action Controversy, But Why?

In a significant legal development, tether wins lawsuit proceedings. The presiding judge took the decision to dismiss the case.

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