Not all stablecoins are the same. As fear caused by LUNA/UST spreads across the industry, Tether CTO Paulo Ardoino assures USDT holders that over 300 million tokens had been redeemed at their $1 peg over the past 24 hours.
Cointelegraph reached out to Ardoino to ascertain if there is cause for concern in USDT’s ability to maintain its $1.00 peg in light of recent events. Ardoino stressed that USDT has maintained its stability through multiple black swan events and highly volatile market conditions and has never refused redemptions:
“Tether continues to process redemptions normally amid some expected market panic following yesterday’s market. In spite of that, Tether has not and will not refuse redemptions to any of its customers, which has always been its practice.” With fear, uncertainty and doubt at levels reminiscent of the 2018 Bitcoin market crash, Ardoino offered perspective given the technical differences between USDT and algorithmic stablecoins:
“Unlike these algorithmic stablecoins, Tether holds a strong, conservative and liquid portfolio that consists of cash & cash equivalents, such as short-term treasury bills, money market funds and commercial paper holdings from A-2 and above rated issuers.” The ongoing Terra /UST situation may well have dented confidence in stablecoins’ and respective platforms’ ability to redeem token swaps for their $1.00 peg. Despite that, Ardoino believes that stablecoins will continue to be a vital cog in the cryptocurrency space. “I do not believe that trust was ever lost for centralized stablecoin users,” he said, adding: “There will always be a market for stablecoins as they present an opportunity for traders to interact with the larger crypto ecosystem.
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