The year 2022 isnt been very favorable for the cryptocurrency market, especially the month of April and May. Now in just a few days, the cryptocurrency market has suffered more losses following Terra blockchain’s stablecoin TerraUSD (UST) depegging event which has caused conflict between Bitcoin and stablecoins.
As USDT/USD lost its peg against the dollar after the currency traded below $0.99, there was a stressful environment around Tether’s USDT as well.
Tether and Bitfinex chief technology officer Paulo Ardoino were quick enough to respond as they assured USDT holders via twitter that 300 million UDST tokens were redeemed at their $1 peg in the last 24hrs.
Terra Will Never Refuse To Redeem Its Customers!
Further answering if there is any cause of concern in regards to USDT’s ability to maintain its 1:1 ratio with US dollars, Ardoino made a point that USDT has maintained its stability towards dollar even when there were multiple black swan events and high volatile market conditions. He also claimed that Tether has not and will never refuse redemptions to any of its customers.
The next thing that Ardoino talks about is fear, uncertainty and doubt (FUD) resembling that of 2018 Bitcoin market crash, he states that unlike algorithmic stablecoins, Tether stands strong, conservative and liquid portfolio consisting of cash & cash equivalents.
Meanwhile the respective platforms have shown the inability to maintain the tokens swap for their $1.00 peg hindering the confidence on the tokens, Ardoino strongly believes that the crypto space will see stablecoins playing an important role.
The system of pegging with US dollar failed when the UST price failed to maintain its price action above $1 which led to huge arbitrage trading as the traders burnt UST for $1.00 worth of LUNA and then sold for a profit.
Hence, now the Terra investors and traders eagerly await Terra’s co-founder, Do Kwon, to come up with his remedy to back the situation.