Tether CTO: TerraUSD collapse this month was 'important moment for the crypto industry'

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A wakeup call, mostly 📉

“It's an important moment for the crypto industry,” Paolo Ardino, chief technology officer of Tether , the, told Yahoo Finance between stints at the World Economic Forum and Coinmarketcap’s “The Capital” conference. “One that will definitely expedite regulations — and not just for stablecoins.”

An illustration picture taken in London on May 8, 2022, shows a gold plated souvenir cryptocurrency Tether coin arranged beside a screen displaying US dollar notes. - Tether is an Ethereum token known as a stablecoin that is pegged to the value of the US dollar, and is currently the largest stablecoin with a market value of USD 83 billion dollars.

With the majority of that growth coming from use of stablecoins to meet margin requirements in leveraged crypto trading, the implications for how stablecoins could pose a structural vulnerability not only to crypto but the financial sector writ large, has remained a forward-looking concern for financial regulators as noted in a May 9 financial stability“The stablecoin sector remained highly concentrated, with the three largest stablecoin issuers—Tether, USD Coin, and Binance USD—constituting...

Though algorithmic stablecoins such as TerraUSD, pose more risk given how it maintained its peg, USDT has been dogged by critics and regulators for years who in the absence of transparency have repeatedly questioned how it backs its circulating coins with the reserve assets.

 

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