Tether Starts New Partnership With Deltec Bank and Trust

By Rishma Banerjee

In a statement, released on the 1st of November, the issuing authority of Tether (USDT), a cryptographic stablecoin, announced that after cutting off ties with their previous financial institution, it has entered into a collaboration with Deltec Bank and Trust, a bank based in the Bahamas. Tether recently had been the victim of mixed publicity, when it lost it 1 dollar peg. This was contrary to their assurance that tether is and will always be equivalent to 1 USD. This fall was probably catapulted by the fact, that Tether’s close ally, crypto exchange BitFinex had severed relations with Noble Bank, which many speculated was Tether’s storage space. Rumours of Bitfinex’s insolvency, also whos shares the same CEO with Tether, also added momentum to Tether’s fall. They also destroyed 500 million tokens, but claimed that it was not a move to scale back supply.

Tether, also announced that its full money supply was backed by US dollars. The statement reads,

“USDT in the market are fully backed by US dollars that are safely deposited in our bank accounts.”

Though the deal had been on the cards and a de facto common knowledge for quite some time now, Tether elaborated that Deltec agreed to bank it “after their due diligence review of our company.”  The statement also says,

“This included, notably, an analysis of our compliance processes, policies and procedures; a full background check of the shareholders, ultimate beneficiaries and officers of our company; and assessments of our ability to maintain the USD-peg at any moment and our treasury management policies.”

USDT, which has now recovered an adequate amount from its misfortune of a few weeks back, at press time is around $0.998. short of its 1 USD peg.

All of this, comes in the face of the rapid and steady growth of the stablecoin industry, in recent months, with the arrival of new competitors in the market like OKEx, and Huobi, which are now gaining traction on major crypto exchanges.