The top-ranked stablecoin issuer firm decided to allocate 15% of revenue to invest in top-ranked crypto (BTC).
Tether is a subsidiary of Bitfinex Exchange. Tether was the first in the crypto sector, which brought the concept of stablecoin, and also in the present time, this company is enjoying the first mover advantage in the crypto sector. This firm manages all the financial activities behind USDT stablecoin, which is pegged exactly in 1:1 with the US dollar.
On 17 May 2023, The Tether team announced that it will purchase Bitcoin every month with 15% of the profit generated through its USDT business.
Tether will use those Bitcoin investments as a reserve fund to back the USDT’s stable value.
Tether CTO Paolo Ardoino said that transparency is everything and here Tether is standing with its reserve of $2.5 billion, alongside USDT reserve funds.
Further, Tether CTO clearly said that investment in Bitcoin by the Tether firm is not a similar approach, followed by the failed TerraUSD stablecoin.
According to Arduino, only 15% of profit investment in Bitcoin will be reserved for the company and it will not directly back the USDT value, which is different from TerraUSD. In short, Tether’s latest move is to maintain the healthy position of the company for healthy USDT financial operations
TerraUSD downfall
TerraUSD stablecoin (UST) was a native stablecoin token on the Terra blockchain network. In May 2022, the UST stablecoin collapsed badly with the Luna token.
Just a few months back, the American regulatory body the SEC initiated charges against Terra blockchain founder Do Kwon & Terraform labs over unregistered securities offerings in America.
Read also: US SEC says Filecoin (FIL) is a security
