Tether Criticizes Deutsche Bank on USDT Stability Query

Examining historical currency pegs, the report raises concerns about stability and transparency, emphasizing the risks and need for regulatory oversight.

May 10, 2024 - 14:13
May 10, 2024 - 12:37
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Tether Criticizes Deutsche Bank on USDT Stability Query
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Tether, the world's largest stablecoin, has criticized a recent report from Deutsche Bank that questioned stablecoins' stability and Tether's solvency. Published on May 7, the research examined 334 currency pegs dating back to 1800 and found that only 14% of them survived. The Bank's analysts then applied this analysis to stablecoins, expressing concerns about the asset class being susceptible to "turbulence and de-pegging events."

The report stated, "While some may survive, most will likely fail, particularly due to the lack of transparency in stablecoin operations and vulnerability to speculative sentiment."

The study focused on the collapse of TerraUSD in May 2022, causing a nearly $45 billion loss in the global crypto market within a week. It highlighted the risks and volatility associated with stablecoins, emphasizing the need for greater transparency and regulatory oversight.

Deutsche Bank also questioned Tether's solvency and its impact on the crypto derivatives market, warning of potential major losses akin to a 'Tether peso moment.' A survey conducted by the Bank with over 3,350 consumers across six countries in March found that only 18% believe stablecoins will thrive, while 42% expect a decline.

Deutsche Bank's research team also raised concerns about Tether's dominance and influence in the stablecoin and derivatives sectors. Tether responded by criticizing the report for lacking "clarity and substantial evidence," and relying on "vague assertions rather than rigorous analysis." They argued that the research did not provide concrete data to support its predictions of stablecoin decline.