Stablecoin giant Tether has criticized Deutsche Bank over a recent report suggesting that stablecoins, including its own dollar-pegged token Tether (USDT), could be experiencing a “peso moment” that would cause uproar in the crypto industry .

In a research report on stablecoins released on May 7, Deutsche analysts pointed to the 2022 collapse of Terraform Labs’ algorithmic stablecoin TerraUSD (TUSD), which led to a market loss of at least $40 billion in a few days. This event served as the basis for broader skepticism about dollar-pegged stablecoin products.

Analyzing 334 currency pegs over the past 223 years, analysts found that 49% of fixed currencies failed, with a median lifespan of about eight to 10 years. They concluded that many linked assets in the crypto space would face significant challenges due to speculative sentiment, potentially leading to unlinking events. Deutsche analysts also highlighted Tether’s lack of transparency regarding its reserves, calling the company’s solvency status “questionable.”

In response, Tether dismissed Deutsche’s report, saying it “lacks clarity and substantive evidence” and relies on “vague claims rather than thorough analysis.” A Tether spokesperson criticized the report for not providing concrete data to support its claims and calling the comparison with TerraUSD misleading and irrelevant.

Additionally, Tether questioned Deutsche Bank’s credibility, citing its history of fines and penalties, casting doubt on its authority to criticize others in the industry.

Tether has faced criticism over the transparency of its reserves. Although the company has released financial statements showing that it has more than $110 billion in fiat-related reserves, some argue that these statements do not amount to a financial audit.

In 2021, the New York Attorney General settled with Tether, fining it $18.5 million and banning the company from operating in the state over alleged misrepresentation of the support of its reserves.

Cash on hand Despite never conducting an official audit since its founding in 2014, Cantor Fitzgerald CEO Howard Lutnick has stated that Tether has “the cash” on hand. The debate over the transparency and stability of stablecoins remains a focal point in the crypto industry.

As stablecoins play a critical role in facilitating crypto trading and providing stability to users, concerns about their resilience and regulatory compliance persist, making transparency and regulatory control essential aspects for stablecoin issuers to address.


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