01 Aug 2019 Pavel Petrov
Tether Migrates To More Blockchains - Crypto Experts Perceive The Migration As Perilous
Tether, the pioneer in stablecoins which is used as an intermediary for crypto exchanges and users, announced that the USDT token would be a suitable medium for transactions on several other blockchains.
There is a tendency of a rise in migration from the domininant Bitcoin and Ethereum platforms among crypto exchanges. If a migration is set to be completed to Tether, there will be risks associated with the complexity of monitoring transactions. The ease of monitoring of transactions has been one of the pivotal aspects that advocates for the decentralized nature of crypto.
Although being a stablecoin, Tether can inflict volatility issues because of the complexity of “figuring out what’s going on” by investors, says Edwin Ong, co-founder of Blockspur.
Crypto exchanges, on the other hand, have built a strong relationship with the Tether organization and their cryptocurrency - USDT. Coin Metrics published a report, stating that Binance and Huobi, for example, use Tether to settle 40 to 80 percent of their transactions. Tether is also popular for being “Bitcoin barometer” as large-scale investors often purchase significant quantities of Tether before buying Bitcoin.
The stablecoin is primarily used as a liquidity pool because banks and institutions still deny crypto exchanges direct access to their services due to money-laundering and terrorism-financing concerns. Tether coins are supposed to be one-by-one fully backed by fiat currencies – the fiat currencies can be ether the US dollar or Euro, but earlier in 2019 Bitfinex stated that Tether’s backing is only around 75%.
Despite the backing allegations, Tether and their USDT coin were quickly established as one of the most prominent ecosystems. Tether was added to the TRON ecosystem in March 2019. In May 2019, Tether entered the EOS blockchain. Algorand’s blockchain is scheduled as the next target. The latest addition of Tether was in Bitcoin’s sidechain – Liquid Network, designed for transaction settlements for market makers and exchanges.
Eric Turner, Messari’s director of research, stated that Tether’s future is hedged on the type and quantity of new blockchain networks.
“The costs for launching and operating blockchain networks are not that high nowadays so that Tether may become the go-to stablecoin option,” Turner added.Blockchain Cryptocurrency Crypto Market Tether crypto cryptocurrency news usd