Tether, famed for being fully backed 1:1 to the US Dollar, and then that actually not being the case, is now reportedly looking at releasing a stablecoin backed by commodities. The commodities it would look at would be a basket of things like gold, silver, oil, and rubber.
Tether was one of the original stablecoins; however, it faced many controversies with many claiming its so-called 1:1 backing was not 100 percent as it claimed. Since then, Tether has come forward and admitted some of these allegations are true.
The idea of issuing Tether (USDT) pegged to a commodities basket was being discussed as an alternative to keeping vast sums under the control of banks, according to Crypto exchange Bitfinex shareholder Zhao Dong, who spoke with Cointelegraph.
That news aside, Tether’s reputation is still not all that high, and its decision to once again put out an offering backed by physical commodities will no doubt raise more questions. Still, Dong put some explanation forwards.
“Tether is fully backed by reserves, out of 4 billion existing USDT about 3.35 billion are now in securities, and 650 million are being lent to Bitfinex. Bitfinex has been raising 1 billion with it’s LEO token IEO and could easily pay back Tether any time (as a matter of fact it already paid 100 million last month).”
He added that:
“Even if you don’t calculate this 650 million as reserves the total amount backed by USD is 83.75 percent (3,350/4000) and not 72 percent as fake news are reporting.”
While all this is going on Bitfinex and Tether have been responding to the New York Attorney General’s case against them. The suit states that Bitfinex lost $850 million in funds needed for user redemptions and used capital from Tether to secretly cover the shortfall; however, they believe the claims are totally meritless.
Tether is quite busy at the moment as there are also plans to issue a Chinese yuan-backed stablecoin. This coin would be held in offshore accounts under the CNHT Ticker. Again, Dong was at pains to state that this token would not get in the way of the PBOC [People’s Bank of China} capital control policy.
“CNHT will not interfere with PBOC [People’s Bank of China} capital control policy because CNH is different than CNY, as it’s already an offshore product. On the contrary, CNHT will help China to expand the adoption of CNH for international settlements,” Dog also told Cointelegraph.