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USDT Tether tanks Stablecoin down 5%

Stablecoin USDT Tether is down 5% to $0.95. This is the lowest the stablecoin has hit in the last 2 years. 

USDT

Close in the heels of UST de-pegging, USDT Tether too could be de-pegging.  The stablecoin USDT Tether is down 5 per cent, which is the lowest dip on its value in the past 2 years. The stablecoin is now trading at $0.95, as per data from CoinMarketCap, as of 12:50 pm IST on Thursday. 

What is USDT Tether? 

USDT Tether is a stablecoin. It is a cryptocurrency pegged to the US dollar. 

How is Tether pegged to USD? 

The stablecoin is pegged to the USD by maintaining a sum of commercial paper, fiduciary deposits, cash, reserve repo notes, and treasury bills in reserves that is equal in USD value to the number of USDT in circulation. 

Why was USDT created? 

The USDT whitepaper states that the objective of creating USDT was to combine the unrestricted nature of cryptocurrencies, that is to send money between users without a trusted third-party intermediary, with the stable value of the US dollar. 

Why is Tether Crashing? 

USDT

Crypto expert and vice president, Research and Strategy at Earth ID, Sharat Chandra, told that, “Volatility in crypto markets is testing the mettle of stablecoins. After non-collateralized algorithmic stablecoin UST, collateralized stablecoin Tether has lost its peg. It’s important to highlight the reserve breakdown of Tether.  Commercial paper and certificates of deposits form a major chunk of USDT reserves followed by cash and bank deposits and reserve repo notes and Money Market Funds. These are not highly liquid assets. In April , Tether’s CTO Paolo Ardoino did promise to reduce  Tether’s holdings of commercial paper from  the current 30 per cent of total reserves.”Chandra further explained: “Decade high inflation and rising interest rates have wreaked havoc on bond and currency markets. The value of assets held by Tether , therefore, has taken a beating in these uncertain times.”Lastly, he pointed out that the US Fed’s “recent Financial Stability Report highlighted that stablecoins are backed by assets that may lose value or become illiquid during stress; hence, they face redemption risks similar to those of prime and tax-exempt MMFs. These vulnerabilities may be exacerbated by a lack of transparency regarding the riskiness and liquidity of assets backing stablecoins.

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交易所

۵ Best Crypto Exchanges of May 2022

Crypto exchanges are where traders can buy, sell, and convert different cryptocurrencies. They are necessary for cryptocurrencies to be traded at the scale they are today. Some exchanges offer the most competitive prices or speeds, whereas others provide specialized financial products.Read on to learn about the best cryptocurrency exchanges, how they work, and which one you should pick.

Best for Beginners: Coinbase

Crypto Exchanges

Why we chose it: We chose Coinbase as the best crypto exchange for beginners because of its easy-to-use interface, extensive educational material on everything from blockchain to volatility, and robust security features.If you’re familiar with crypto, chances are you’ve already heard of Coinbase. The exchange is one of the largest and most well-known in the U.S., and its debut on the public market last year was seen by many as a legitimization of the crypto market.

The Coinbase platform does a great job of lowering the barrier to entry for investing in crypto, with a straightforward onboarding process that eases users into trading. At the same time, its interface makes navigating the platform and managing crypto a seamless experience.Coinbase also features a comprehensive and accessible variety of learning materials. Users are encouraged to use these resources through the Coinbase Earn program, which teaches how to trade specific cryptocurrencies and rewards users with free crypto.

Best for Low Fees: Binance.US

Why we chose it: We chose Binance.US as the best crypto exchange for low fees because it features one of the most generous fee structures across all the trading platforms we considered.Binance is the world’s largest cryptocurrency exchange by trading volume, and its domestic counterpart, Binance.US, offers many of its parent company’s advantages. One of its biggest attractions is a competitive maximum 0.1% maker/taker fee. This fee starts low and keeps getting lower as your trading volume increases.

Best for Security: Crypto.com

Most reputable crypto exchanges feature a solid cybersecurity infrastructure, but this is where Crypto.com really stands out. The exchange is ranked first in the Cybersecurity Ranking and CERtification Platform’s top 100 exchanges by cybersecurity rating.Crypto.com employs various techniques to keep users’ cryptos secure on its trading platform, including offline cold storage for all crypto, a regulated custodian bank account for traditional currency, and regular software peer-review. It also uses multi-factor identification with a password, biometric, email, phone, and authenticator verification.

Best for Earning Interest: BlockFi

The exchange’s main highlight is its BlockFi Interest Account, offering up to 9.5% APY as monthly compounding interest to crypto investors who store their assets in the account. The platform also lets users use existing bitcoin as collateral for a loan.In addition to its novel financial products, BlockFi also features an affordable fee structure and a strong cybersecurity infrastructure. The exchange charges spread fees and withdrawal fees, but no transaction fees for trading on its exchange. To keep your data secure, BlockFi uses tools such as two-factor authentication and allowlisting, which lets users ban withdrawals or restrict them to certain addresses to avoid theft.

Best Decentralized Exchange: Bisq

Crypto Exchanges

Why we chose it: We chose Bisq as the best decentralized exchange because it follows the ethos of Bitcoin best by maintaining an open-source platform that is completely decentralized without limiting currency support.Bisq doesn’t need a third party to conduct cryptocurrency transactions, nor does it require users to submit personal information to trade on the platform. It’s an excellent alternative for Bitcoin fans looking for a wide variety of coins to trade with, including altcoins like Cardano, XRP, and Dogecoin. In fact, it’s not typical for decentralized exchanges to support so many digital assets — and fiat currency.

Other crypto exchanges we considered

The following trading platforms are all excellent options, especially for newer traders. However, they are not dedicated crypto or bitcoin exchanges but primarily deal in other securities, like stocks and futures. We decided to list them separately for this reason.

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NFT

NFT Market Collapses Just As Square EnixSells Tomb Raider To Bet Big On Blockchain

You know what no one could ever have predicted?

NFT

That a market based on imaginary ownership of infinitely duplicable jpeg images might not be end-game, long-term sustainable. As The Wall Street Journal reports, the NFT market is “flatlining,” down 92 percent from last September. Which makes it just the most incredible time for Japanese publisher Square Enix, famed for properties like Final Fantasy, to sell off most of their Western-facing IP and studios to gamble on the batshit scheme.

blockchain market

Square Enix is intending to sell Crystal Dynamics, Eidos Montreal and Square Enix Montreal to the monolithic The Embracer Group, along with IPs for games like Deus Ex, Tomb Raider, Thief, and Legacy of Kain. Why? Because, to quote Squenix, “the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud.” Which is to say, its previously announced desire to milk the NFT/blockchain market.

NFT

feel like the most extraordinarily precise emblem of the 2020s. It’s all a glaringly obvious pile of bullshit. Companies are literally selling a line of code on what they call a blockchain, to repackage the extremely old idea of digital asset ownership as the next big investment you should get in on now while the going is good. You’ve been able to own things like video game skins for a long time, of course. Somehow, though, many of these companies are putting a lot of effort into pretending that you can now own a picture, and then pretending that in doing so the picture somehow becomes imbued with inherent worth—all given life by enough idiots clapping their hands and shouting how they believe in fairies.

If not, well, I’ve got these lovely jpegs of some bridges I could sell them.

NFTs were always going to be a bubble, and no doubt they’ll have little spikes, resurgences of interest with each new nonsensical twist, reaching nowhere near as high as 2021’s but allowing the True Believers to keep duping themselves and others for a while to come. But let’s hope that this news of a market collapse is finally enough to scare the games industry away from this ludicrous money pit. We’ve reached out to Square Enix to ask if the news has given them any pause.

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虛擬貨幣

What are the differences between a digital currency and a cryptocurrency?

cryptocurrency Central bank-backed digital currencies, such as the potential digital euro and digital yuan, may become a reality in the coming years. Unlike cryptocurrencies such as Bitcoin and Ethereum, these currencies promise less volatility and greater security. In addition, they will have the support of their respective monetary institutions, responsible for ensuring financial stability.

cryptocurrency

Centrally issued currencies backed by central banks

Unlike these two cryptocurrencies, which also have DLT (distributed ledger technology), officially backed digital currencies will be issued centrally and will be backed by their central banks. “One of the differences between a digital euro and a Bitcoin is the way they are issued. While the operations, in the case of the euro, are centralized and the only one that can issue it is the ECB, in the case of a Bitcoin it is totally different,” says Alberto Muñoz Cabanes, Professor at the Department of Applied Economics and Statistics at the National Distance Education University (UNED).

cryptocurrency

Cryptocurrencies backed by corporations

It is also worth mentioning that digital currency projects not backed by central banks, but by corporations are subject to regulation, such as Libra, now Diem, the cryptocurrency project backed by Facebook. “There are other types of solutions that seek to combine the innovative functionalities found in cryptocurrency networks with greater guarantees for users,” says Español.

These types of currencies are backed by an asset reserve of the institution that issues them and can be less risky than cryptocurrencies as a means of payment. “However, we must bear in mind that, given the novelty of these proposals, the authorities are currently analyzing them and, where appropriate, adapting financial regulation to accommodate these types of solutions,” explains the BBVA economist.

Español also stresses that “these types of solutions, when they have a global reach and a large number of users, pose significant challenges to financial stability due to their systemic importance.”

In search of primacy in digital currencies

The People’s Bank of China, the equivalent of the ECB in Europe, has been running tests of its digital currency since April with the help of four banks in the country. Given the strength that the two Asian technology giants, WeChat and Alipay have acquired in the digital payments environment, China wants to take control from now on, seeing how well these means of payment have worked in the country. Their aim is to have the digital yuan be fully operational by 2022. In the longer term, the Chinese government plans for its digital currency to replace its physical currency across the country.

At an international level, the Asian giant is looking towards a hypothetical scenario in which its digital yuan would become the world´s preferred currency. “The fact of being the first to launch your digital currency allows you to eliminate internal problems, such as ´black money,´ while increasing your fiscal efficiency, since tax payments would be immediate. It would also allow the speeding up of trade, because payments are instantaneous,” explains Muñoz, who underlines the importance that a currency of this type could have on international transactions. The convenience of this type of digital payment could act as a stimulus for rapid adoption by those involved.

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Uncategorized

Tether-Growing Regulatory Pressure on Tether

The growing appeal of stablecoins in the cryptocurrency industry has been leading to increases in regulatory scrutiny. Tether, the leading stablecoin by market valuation, has been attracting much scrutiny. In response, other fiat-pegged currencies have been attempting different approaches to avoid using the banking system altogether.

Tether

Tether Is King In Many Ways

When glancing over the stablecoin segment in cryptocurrency, ignoring Tether (USDT) is impossible. It is the world’s leading stablecoin by market capitalization and overall trading volume. At a current market cap of over $80 billion, Tether is only behind Bitcoin (BTC) and Ethereum (ETH) in these rankings. That makes the project more “valuable” than thousands of crypto assets, including Ripple (XRP), Dogecoin (DOGE), Binance Coin (BNB) and many others. 

Additionally, Tether commends the highest trading volume of all stablecoins. With over $45 billion in daily volume — primarily across Bitcoin, Ethereum, USD, and Circle (USDC) pairs — it is a dominant force in the industry. Unfortunately, that success also attracts ample scrutiny, as many people have started to question the company’s operations. More specifically, Tether claims it has the financial reserves to keep the USDT supply at its current level.

The problem here is how there has never been an audit of Tether’s reserves by an independent party. As a result, regulators have begun to pay much closer attention to Tether and how the company operates. The commercial paper reserves held by the company are especially of great interest. Figuring out which reserves the company holds is crucial in determining whether the company needs to be regulated in the future. 

A recent unveiling by Tether of its reserves indicates not all USDT is backed by paper reserves. Instead, other vehicles are used to issue the asset, including bonds, secured loans and cryptocurrency. While the company will commit to a thorough audit in the coming months, many questions remain.  

Not Tether’s First Tangle With Controversy

Since its inception in 2014, Tether has been at the forefront of attention and speculation. The project, formerly known as Real coin, initially promised that every Tether would be back 1-to-1 by traditional currency. That changed in 2019, when the company rephrased it to “100% backed by our reserves, including traditional currency.” Moreover, there is a mention of “including assets and receivables from loans made by Tether to third parties and affiliates entities.”

That latter part stirred much controversy, as there has been wild speculation as to how the same people run Bitfinex and Tether. While they are separate business entities, there is a significant overlap in personnel per the Paradise Papers. To this date, Bitfinex and Tether claim they operate independently from one another. 

Tether’s dominant position has not changed despite these tussles and increasing regulatory scrutiny. There is no shortage of alternative stablecoins either, including USDC, BUSD, UST, DAI, FRAX, TUSD, USDP, etc. Most of these stablecoins pursue a similar strategy to Tether: Keep funds in a bank account to issue digital assets pegged to the U.S. Dollar. However, there are alternative options that may continue to build momentum. 

Creating Different Types of Stablecoins

Besides fiat-backed stablecoins, developers have shown an appetite for experimenting with other concepts. The first solution is a commodity-backed stablecoin, relying on interchangeable assets, including precious metals, real estate, oil, etc. While it lets holders exercise ownership over real-world assets, it is not a very popular option among crypto enthusiasts today. The best-known commodity-backed stablecoin is Digix Gold, commanding a market cap of just under $1.3 million. 

A second option comes in the form of crypto-backed stablecoins. It may seem unusual to issue a stablecoin tied to the most volatile assets in the world. However, such assets are also trustless and provide better transparency, even if they may require over-collateralization. Several such assets exist, including DAI, Wrapped Bitcoin, etc. These currencies do not necessarily represent the value of $1, but that of the underlying asset.

The last option is algorithmic stablecoins. Unlike any of the above, these currencies do not require assets to provide value. Instead, they use an algorithm to control the supply and its “peg” to $1. If demand rises, the supply goes up to bring the price back to normal. When the demand dwindles, outstanding coins are purchased back from the market to reduce the circulating supply. 

Growing Demand For Tether Alternatives

Regardless of how the stablecoin is issued, a demand for alternative currencies to Tether’s USDT is inevitable. The fiat-backed approach remains popular for USDC and BUSD, with market caps of $52.7 billion and $17.7 billion. However, there is a strong increase in circulation for TerraUSD (UST), a currency that leverages an algorithmic peg. Users can swap $1 worth of LUNA – Terra’s native currency – for 1 UST and vice versa at all times. Its market cap has risen from $1.7 billion to $15.5 billion in the past year, confirming strong demand.

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