USDT Tether Predicaments Promote TrueUSD, Gemini Dollar and USDC
USDT Tether is a stable coin. By definition, a stable coin is just that: stable. This means in the face of uncertainty or periods of high price volatility, crypto curious investors can easily transit in and out of the market. In fact, that is the sole intention of stable coins as USDT. Though they have been lauded as a cryptocurrency miracle and a funnel through which investors would enter the market, it is still mired with problems.
With USDT Tether, it mainly circles around the failure of USDT issuers to maintain a stable working and professional relationship with banks. Digging deeper and this failure is disrupting operations. Early this month, BitFinex—an exchange with affiliations with the stable coin, had fiat deposit problems.
Trouble behind USDT Tether
Expectedly, this triggered rumors of insolvency. But the exchange did quash them providing proof that indeed their funds are safe and there is nothing like “Mt. Gox” version 2 in progress. Besides banking woes, Tether is struggling hard to appease critics who are pushing for a full audit of their reserve.
So far, Tether executives are yet to release audit findings to the public and they are adamant that there is no public audit firm that can cross-check their workings because of lack of crypto audit standards. Though it may be understandable, this is not enough to appease users and the community now that the coin is highly liquid commanding a higher market share. Combined with negative publicity, lack of trust and legal/regulatory ramification, BitFinex and USDT are slowly bleeding.
Superior Alternatives in TrueUSD, USDC and Gemini Dollar
As they bleed, the market is realigning, providing possible replacement through Gemini Dollar (GUSD), TrueUSD and Circle’s USD Coin (USDC). Supporting these coins are traditional players in the crypto space. Gemini Exchange is behind GUSD while Circle which now own Poloniex—another exchange is fronting USDC.
What’s common with these alternatives is that there is transparency. GUSD fiat reserves are subject for monthly public audit and there is FDIC insurance. Furthermore, their total supply regulating smart contracts have passed through a security audit.
On the other hand, TrueUSD operates through an escrow account. This means funds are secure with complete attestations. Additionally, like GUSD, their smart contracts are open source and operate via reliable trust companies.