Update on 13 May at 09:49 UTC – Paolo Ardoino, CTO of Tether and Bitfinex tweeted that Tether has cut some holdings of commercial paper. In the accompanying news article, Ardoino explained that the majority of Tether’s reserves are now in U.S. Treasuries. Tether has reduced its exposure to commercial papers since November.
The crypto winter could be claiming more casualties among the stablecoin camp. The depegging of TerraUSD (UST) on Tuesday triggered market sell-offs, and now Tether (USDT) appears to be losing its footing, having slipped against the U.S. dollar.
The algorithmic stablecoin UST is, as the name implies, algorithmically backed. LUNA, the ecosystem’s corresponding token, has sunk over 95% since Tuesday, while UST continues to languish around the $0.50 mark.
Cointelegraph’s resident experts shared their explanations for why UST crashed in a special edition of “The Market Report” yesterday. The plan for Terraform Labs’ algorithmic stablecoin continues to roll out, but UST is still struggling.
Data from Cointelegraph Markets Pro confirmed that various stablecoins have shown greater volatility than usual: USDT, the world’s largest stablecoin, traded under $0.99, Gemini Dollar (GUSD) exceeded $1, and USD Coin (USDC) also appreciated.
Paolo Ardoino, chief technology officer of Bitfinex and Tether, shed some light on the difference between asset-backed stablecoins and their algorithmic counterparts in a conversation with Scott Melker:
“If you want to do an algorithmic stablecoin, for…