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Stablecoin issuer Tether rejects Deutsche Bank’s argument regarding its solvency

This statement underscores Tether’s confidence in its solvency and ability to maintain a steady rate against the US dollar.

Date: 2024-05-10 Author: Marek Stiller
Stablecoin issuer Tether rejects Deutsche Bank’s argument regarding its solvency

In its latest response, Tether, the world’s largest stablecoin, sharply criticized Deutsche Bank‘s statement that questioned the sustainability of stablecoin and Tether’s solvency.

A Deutsche Bank study released Tuesday shows that 334 stablecoin pegs have been examined since 1800 and found that only 14% have survived. Referring the study to stablecoins, the bank’s analysts noted that this asset class is vulnerable to “turbulence and destabilization events.”

“While some may survive, the majority are likely to fail, especially due to the lack of transparency in stablecoin operations and susceptibility to speculative sentiment.”

The study analyzed the collapse of stablecoin TerraUSD, leaving a ripple effect throughout the cryptocurrency market. “These incidents highlight the volatility and risks associated with stablecoins and the need for greater transparency and regulation in the cryptocurrency market,” the report reads.

In addition, Deutsche Bank criticized Tether, the dominant stablecoin coin, questioning its solvency and industry standards for cryptocurrency derivatives.

Additionally, the report highlighted the challenges of constructing stablecoin currency pegs, despite the novelty of cryptocurrencies. “It is likely that we will see much more volatilityin the coming years,” it added.

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The German banking giant surveyed more than 3,350 consumers (550 each in France, Germany, Spain, Italy, the UK and 600 in the US) in March, questioning the stability of stablecoin coins.

“Only 18% of consumers expect them to thrive, while 42% expect them to disappear,” the – the survey showed.

Tether sharply criticizes Deutsche Bank’s warning on Stablecoin coins

It is worth noting that the research team wrote that it is concerned about Tether, given its implications in the face of a “monopoly in the stablecoin market.” According to the Bloomberg report, the analysts also pointed out the dependence on Tether in the cryptocurrency derivatives market.

Referring to Deutsche Bank’s stablecoin claims, Tether said the study “lacks clarity and substantial evidence, as they rely on vague claims rather than rigorous analysis.”

“While it attempts to forecast a decline in the value of stablecoin coins, it fails to provide concrete data to support its claims.”

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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