“Investors withdraw over $7 billion from tether, raising fresh fears about stablecoin’s backing”
May 17, 2022
“Investors have withdrawn more than $7 billion from tether since it briefly dropped from its dollar peg, raising fresh questions about the reserves underpinning the world’s largest stablecoin.
Tether’s circulating supply has slipped from about $83 billion a week ago to less than $76 billion on Tuesday, according to data from CoinGecko.
The so-called stablecoin is meant to always be worth $1. But on Thursday, its price slipped as low as 95 cents amid panic over the collapse of a rival token called terraUSD.
Most stablecoins are backed by fiat reserves, the idea being that they have enough collateral in case users decide to withdraw their funds. But a new breed of “algorithmic” stablecoins like terraUSD, or UST, attempt to base their dollar peg on code. That’s been put to the test lately as investors have soured on cryptocurrencies…”
https://www.cnbc.com/2022/05/17/tether-usdt-redemptions-fuel-fears-about-stablecoins-backing.html