Tether (USDT), the asset-backed cryptocurrency stablecoin, is among the three crypto companies that have pledged 5 million TRY to help Turkey after the earthquake. Joining it, Bitfinex, Keet and Synonym also wish to express their sincere condolences and solidarity to the people of Turkey with this gesture.
It is clear that the scale of the disaster was both widespread and catastrophic for the people. Thus, it is absolutely essential at a time like this that we come together to support the people of the region in the wake of this tragedy.
Tether (USDT): the latest news on the stablecoin
As anticipated, on behalf of Bitfinex, Keet, Synonym and Tether, 5 million TRY are being pledged for immediate humanitarian relief, recovery efforts and ways to provide ongoing support to help Turkey rebuild its future.
However, the news for the stablecoin Tether (USDT) does not end there. Indeed, it was recently learned that according to its chief technology officer, the company behind Tether (USDT), the world’s largest stablecoin by market capitalization, never received any loans from failed crypto lender Celsius.
Paolo Ardoino, chief technology officer of Tether and the crypto exchange Bitfinex, took to Twitter on 31 January to reiterate that Tether has “never taken any loans from Celsius.”
The tweet was shared in response to the Celsius bankruptcy examiner’s report, which allegedly incorrectly stated that Tether was among Celsius’ borrowers along with companies such as Three Arrows Capital, which borrowed $75 million.
The report denotes that Tether’s exposure eventually grew to over $2 billion, becoming a problem in late September 2021, when it was described to the risk committee as an “existential risk” to Celsius.
Denying any exposure to Celsius, Ardoino suggested that examiner Shoba Pillay confused prepositions in the examiner’s report, meaning “Celsius loans from Tether” instead of “Celsius loans to Tether.”
In fact, Tether’s chief technology officer in a Twitter thread suggested by Financial Times reporter Kadhim Shubber reports that this is a typo or misdescription.
Shubber also mentioned that the examiner’s report is associated with some level of misunderstanding, stating:
“The examiner’s report describes that Celsius has ‘loans’ to Tether, but I believe the exposure stems from Celsius posting collateral in excess of the amounts borrowed from Tether.”
Tether (USDT) the first stablecoin to invest in failed company Celsius
As previously reported, in 2021 Celsius would have borrowed $1 billion from Tether with Bitcoin. Celsius founder Alex Mashinsky said the company was paying an interest rate between 5% and 6%.
In June 2022, Tether said it had liquidated the $900 million loan, about a month after Celsius stopped withdrawals. According to the examiner’s latest report, the loan amount was much higher than $1 billion.
Examiner Shubber reports, adding that the collateral amounted to 17% of all Celsius assets, as follows:
“Celsius borrowed $1.823 billion in USDT stablecoins from Tether, pledging $2.612 billion of its assets under management as collateral.”
In addition to providing large loans to Celsius, Tether is known to have been one of the first investors in the failed company. In 2020, Celsius secured a $10 million capital increase from Tether, with Mashinsky stressing the importance of the company’s approval.
Tether (USDT) as leading stablecoin in emerging markets
Tether (USDT) is now the leading stablecoin in emerging markets globally. Indeed, in addition to Brazil, people turn to Tether in Lebanon when they need to buy groceries.
Moreover, people turn to Tether in Turkey when they need to protect their savings, in Myanmar when they need to fight for democracy, and in Argentina when the country’s economic stability is in question.
Indeed, we can see that Brazil has been upholding record registrations by Brazilian companies holding USDT, the most popular cryptocurrency in Brazil. In addition, Tether provides real utility to countries with unstable fiat currencies, unreliable payment binaries, and insecure property rights. This is as true in Egypt as in Venezuela.
Since early 2022, the Egyptian pound has fallen from about £15 per dollar to £30 per dollar. The official rate is thus a 50% drop against the dollar in one year.
Whenever a country’s currency begins to inflate like that of Egypt, it is virtually a guarantee that a black market for dollars will emerge. In December the official exchange rate was 24.6 pounds per dollar but in black markets it was 32 pounds per dollar.
These prices are supported by the fact that people cannot easily access dollars and there is not enough supply available for circulation. USDT is able to bring affordable dollar liquidity to these areas.
Tether’s launch of Keet Mobile
A final and recent development involving the Tether (USDT) stablecoin is the launch of Keet Mobile along with the support of Holepunch, a fully encrypted platform for creating peer-to-peer applications supported by the stablecoin itself.
As such, users will be able to initiate a call directly to another individual’s computer, laptop or cell phone without third-party access or interference. Hence, Keet Mobile is the first in a series of peer-to-peer applications that will put control back in people’s hands.
Tether believes in financial freedom, and what is as fundamental as financial freedom is the freedom to communicate. According to Tether’s CTO, Paolo Ardoino, the idea of surrendering one’s private data to large companies, even to perform the simplest transactions, is doomed to die.
Source: https://en.cryptonomist.ch/2023/02/07/tether-usdt-the-stablecoin-pledged-5-million-try-to-help-turkey/