2023-01-16
Tether USDT processed $18.2 trillion in 2022. More than Visa $14.1
trillion and Mastercard $7.7 trillion. USDT massive increase in transaction
volume comes from rapid growth over the use of stablecoins in the past several
years.
However, USDT lost its pegged to 1:1 US dollar ratio for many times.
USDT were able to recovered to 1:1 ratio after it lost 1 US dollar pegged. If a
lot of people rush to withdraw USDT to USD, Tether cannot immediately pay USD
to users because Tether has both USD and other non-liquid assets as underlying
assets. U.S. treasury bills are not liquid asset that can turn into USD
immediately.
Tether Underlying Assets (Update September 30, 2022)
U.S. Treasury Bills 70.71%
Money Market Funds 12.66%
Cash and Bank Deposits 10.83%
Reverse Repurchase Agreements 5.39%
Non-U.S. Treasury Bills 0.32%
Commercial Paper and Certificate of Deposit 0.09%
Secured Loans 9.02%
Corporate bonds, Funds, and Precious Metals 4.69%
Other Investments (Including Digital Tokens) 3.85%
Users benefit more in case stablecoins’ underlying asset is cash or
cash deposits. In the perspective of many users, stablecoins are equal to cash
because cash is liquid asset. However, none of the stablecoins other than USDT
are 100% cash. Stablecoins with high percentage of cash as underlying asset
might view as a better stablecoin to prevent bank run.
