Tether Untethered: World’s Biggest Stablecoin Loses $1 Peg As Crypto Market Crashes

Tether Untethered: World’s Biggest Stablecoin Loses $1 Peg As Crypto Market Crashes

Share to Linkedin The price of Tether, the world's biggest stablecoin and a cornerstone of the cryptocurrency ecosystem, slipped away from its $1 peg on Thursday, intensifying worries amid a market-wide crash and plummeting cryptocurrency prices. Tether lost its $1 peg on Thursday. Tether's USDT—a stablecoin that is supposed to be tied to the U. S. dollar one-for-one—fell as low as 94 cents early on Thursday, according to Coinbase. The drop, around 6% below its $1 peg, comes amid a major cryptocurrency crash that has erased hundreds of billions from the market after another stablecoin, TerraUSD, completely slipped its $1 peg. Unlike Terra—which holds its $1 peg by trading a paired token, Luna—Tether says its tokens are backed by actual currency, though the group has been criticized for its lack of transparency over its holdings and was fined $41 million by the U. S. Commodity Futures Trading Commission in 2021 for making misleading statements about its reserves. Stablecoins are supposed to be a relatively safe haven in the otherwise highly volatile crypto markets. They are kept stable by being pegged to other assets—including fiat money like the dollar and tangible assets like gold—or through an algorithm. With a market capitalization