Stablecoins may be safer than deposits held in commercial banks, according to Diogo Monica, general partner in Haun Ventures.
Speaking of a panel discussion titled “Stablecoins: Programmable Money in a Digital World” In proof of a conference conference in Paris on June 10, Monica said many stablecoins supported reserves held worldwide systematically important banks (G-SIBs) or short-term US Treasury bills, which she looked more than deposit Bank.
“It’s really better than having a dollar on a commercial bank,” Monica said.
Monica’s comment is defined in the fact that a deposit in a commercial bank is a responsibility for the bank, with possible consequences for the lender if the bank fails and they are not covered by deposit insurance. A reliable stablecoin provider is expected to rely on G-SIB deposits or short-term bills instead, which is safer.
In other words, Monica argues that Stablecoins represents a title to the top-tier collateral than a potentially trembling regional bank. However, stablecoins and their providers often introduce their own category of risk.
Related: Tether USDT Stablecoin saw in Bolivian store price tags
Tether case has been highlighting the risk of stablecoin
While stablecoins can offer stronger collateralization in theory, their reliability depends excessively on the behavior of the discharge creature. Tether, the largest centralized stablecoin issuer through the market cap, faces repeated -repeating transparency and risk management.
In late 2018, the Crypto Capital-the Tether-Tied CryptoCurrency Exchange Payment processor-has lost access to approximately $ 850 million worth of exchange assets. Documents in court Show How it led to Tether lending at least $ 625 million of its reserves to Bitfinex to maintain the solvent of the platform.
“At any time Bitfinex or Tether revealed the market that Tether had moved at least $ 625 million to Bitfinex, or that Bitfinex had experienced critical liquidity issues,” read documents in court.
To an affidavit Filed On April 30, 2019, Tether’s general advice said USDT (USDT) is approximately 74% -back by cash and equivalent due to debt. Stablecoin remained liquid until Bitfinex fully repayed its debt to Tether, wiring The last $ 550 million in early 2021.
Related: Tether plans to open the Bitcoin Mining OS source; CEO says ‘no need’ for 3rd party sellers
Lack of transparency is still an issue
Despite publishing reserve testimonies in recent years, Tether has not yet produced a full independent audit. In March, CEO Paolo Ardoino said the company was “Engaged in a large four accounting firm“As it pursues a long-awaited audit of its reserves. However, the audit has not been announced.
Lack of certainty led to the founder of Cyber Capital Justin Bons to go until claiming that tether was “one of the biggest existing crypto threats in total” in late 2024. He said in time:
“The ‘auditor’ report or an ‘accountant report’ is not a formal audit! Despite the claims, Tether has not submitted its alleged reserve to a truly uncontrolled, third-party audit!”
Magazine: Crypto wants to overthrow banks, now they turn into the stablecoin fight
