Tether claims they were ready for this bank run |

In the past few weeks, there has been a massive increase in Bitcoin. The price of BTC is now over $7000, with many people expecting it to continue upwards until at least March 2020. However, since the bank run that Tether claimed would never happen was about to actually happen (and for good reason), they announced that their money wouldn’t be affected by this bank run and will still have value as usual.,

Evergrande Group, a Chinese conglomerate that owns the Evergrande Real Estate Group and Hong Kong-listed Hengda International Holdings, has announced they were ready for this bank run. The company had recently issued their own cryptocurrency called “Evergrande tether.”

Last month, Tether’s CTO, Paolo Ardoino, informed us that Tether was ready for a bank run. Ardoino and the Tether team have run simulations to mimic a financial crisis similar to the one that occurred in 2008, and they think that they will be able to fulfill all redemptions even if a comparable event unfolds.

Tether’s dollar peg was shattered yesterday as it dropped below Tether’s peg to the US Dollar was rocked yesterday as it fell to $0.95 on major exchanges such as Binance.US and Coinbase. The token traded below $0.995 for the longest time since March 2020 closing several four-hour candles below the 0.005 level. Currently, it has recovered to$0.993 and it looks like the peg may soon be restored. If the peg does come back then Tether may view a 5% max pain drop and a 48-hour recovery as a successful stress test. However, the potential for this level of volatility could now be priced into the crypto market as a whole. When stablecoins have the potential to swing 5% confidence will undoubtedly be hit..95 on key exchanges including Binance.US and Coinbase. For the first time since March 2020, the coin traded below Tether’s peg to the US Dollar was rocked yesterday as it fell to $0.95 on major exchanges such as Binance.US and Coinbase. The token traded below $0.995 for the longest time since March 2020 closing several four-hour candles below the 0.005 level. Currently, it has recovered to$0.993 and it looks like the peg may soon be restored. If the peg does come back then Tether may view a 5% max pain drop and a 48-hour recovery as a successful stress test. However, the potential for this level of volatility could now be priced into the crypto market as a whole. When stablecoins have the potential to swing 5% confidence will undoubtedly be hit..995, closing many four-hour candles below the 0.005 threshold. It has already returned to Tether’s peg to the US Dollar was rocked yesterday as it fell to $0.95 on major exchanges such as Binance.US and Coinbase. The token traded below $0.995 for the longest time since March 2020 closing several four-hour candles below the 0.005 level. Currently, it has recovered to$0.993 and it looks like the peg may soon be restored. If the peg does come back then Tether may view a 5% max pain drop and a 48-hour recovery as a successful stress test. However, the potential for this level of volatility could now be priced into the crypto market as a whole. When stablecoins have the potential to swing 5% confidence will undoubtedly be hit..993, and it seems like the peg will be restored shortly. If the peg returns, Tether may consider a 5% maximum pain reduction and a 48-hour recovery to be a satisfactory stress test. However, this amount of volatility may now be priced into the cryptocurrency market as a whole. When stablecoins have the ability to swing 5%, confidence will almost certainly be damaged.

Tether claims they were ready for this bank run |

“Reminder that tether is honoring USDt redemptions at 1$,” Ardoino tweeted in response to the present market situation. Ardoino indicated in our conversation that Tether had never denied redemption. However, it seems that to utilize their redemption service, investors must have at least $100,000 Tether and must be outside of the United States unless they qualify as an Eligible Contract Participant. Tether said that in the last 24 hours, they had processed over $300 million in Tether redemptions.

Ardoino said when asked whether Tether will always be linked to the dollar:

“When we have to model what a bank run crisis might look like on a Tether portfolio, we take into consideration the worst times in financial history.”

He goes on to say that if we have hyperinflation and a “pizza costs $1 million,” it will cost “1 million USDT.” The topic of discussion was escalating global inflation and the potential death of fiat money. Today, however, stablecoins are in the headlines, with fears that they would be wiped out due to the fluctuating market circumstances.

For more information on how Tether planned for a bank run, see the complete interview here (audio quality is poor due to a technical issue):

 

Tether published the following statement in response to a direct request for comment on current market conditions:

Tether is delighted to inform that business as normal has resumed, despite some anticipated market panic after this week’s market moves. 

Tether continues to honor standard redemptions, with verified clients (in approved areas) able to redeem USDt for USD$1 on Tether.to. Tether has honored over 300 million USDt redemptions in the previous 24 hours alone, and is already processing over 2 billion today. 

Tether has remained stable through many black swan occurrences and very unpredictable market circumstances, and Tether has never failed to honor a redemption request from any of its verified consumers, even in its darkest days. Tether will continue to do so, as it has done in the past.

Tether is the most liquid stablecoin in the market, backed by a strong, conservative portfolio that consists of cash & cash equivalents, such as short-term treasury bills, money market funds, and commercial paper holdings from A-2 and above rated issuers. The value of Tether’s reserves is published daily and updated once per day.  You can find the most recent information here: https://tether.to/en/transparency.

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Tether claims they were ready for this bank run. The cryptocurrency is a digital asset that can be transferred between people or used to pay for goods and services in the real world. Reference: what is tether.

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