• September 28, 2023


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Tether Would Be Technically Insolvent If Assets Fall By 0.3%

ByLouis Adams

Aug 30, 2022 #Stablecoin
Reading time: < 1 minute

According to The Wall Street Journal, a fall in the value of reserve assets by 0.3% could lead the issuer of the stablecoin Tether (USDT) to “technical insolvency.”

The publication has concluded that such a “thin cushion of equity capital” threatens chaos in the market if Tether’s liabilities exceed its assets.

The newspapers’ journalists have warned that under such circumstances, trust could dwindle, leading to a wave of people wanting to convert stablecoins to fiat.

According to the Tether Limited website, the organization’s capital stock is estimated at $190.9 million with assets of $67.74 billion.

79.62% of USDT reserves are backed by cash, cash equivalents, other short-term deposits and commercial paper.