Tether slams Deutsche Bank report questioning USDT stability and solvency

Tether,
the
largest
stablecoin
in
the
world,
has
slammed
a
recent

Deutsche
Bank
report
that
questioned
the
stability
of
stablecoins
and
Tether’s
solvency.

The

research,
published
on
May
7,
analyzed
334
currency
pegs
from
the
year
1800
onward
and
revealed
that
only
14%
of
the
total
had
survived.
The
Bank’s
analysts
then
applied
their
analysis
to
stablecoins,
noting
their
concerns
regarding
the
asset
class,
which
they
believe
is
prone
to
“turbulence
and
de-pegging
events.”

“While
some
may
survive,
most
will
likely
fail,
particularly
due
to
the
lack
of
transparency
in
stablecoin
operations
and
vulnerability
to
speculative
sentiment,”
the
report
noted.

The
study
specifically
analyzed
the
collapse
of
the
TerraUSD
stablecoin
in
May
2022,
an
event
that
wiped
out
almost
$45
billion
from
the
global
crypto
market
within
a
week.
It
pointed
out
the
inherent
risks
and
volatility
associated
with
stablecoins
and
stressed
the
significance
of
greater
transparency
and
regulatory
oversight
over
them.

Deutsche
Bank
also
expressed
concern
about
Tether
specifically,
questioning
its
solvency
and
influence
in
the
crypto
derivatives
market.
A
‘Tether
peso
moment,’
the
report
said,
could
lead
to
major
losses,
severely
affecting
leveraged
traders
and
impacting
the
broader
crypto
ecosystem.

Furthermore,
the
Bank’s
survey
of
over
3,350
consumers
in
March
across
six
countries
found
that
only
18%
believe
stablecoins
will
thrive,
while
42%
expect
them
to
decline.
The
survey
was
conducted
in
France,
Germany,
Spain,
Italy,
the
UK,
and
the
United
States.

Deutsche
Bank’s
research
team
also
raised

concerns
about
Tether’s
dominance,
given
its
perceived
monopoly
within
the
stablecoin
market
and
its
influence
in
the
derivatives
sector.

“The
30%
de-peg
rate
among
some
stablecoins
is
therefore
hardly
surprising,
and
many
defunct
stablecoins
are
hard
to
account
for,”
the
analysts
noted.

Tether
dismissed
the
report,
criticizing
it
for
lacking
“clarity
and
substantial
evidence,”
and
relying
on
“vague
assertions
rather
than
rigorous
analysis.”

The
stablecoin
provider
asserted
that
the
research
didn’t
provide
concrete
data
to
back
its
predictions
of
stablecoin
decline.