An article titled “Tether – the coin that could wreck crypto” was published in the NY Times on 18th June 2022, which had a lot in common with my own article “How “Stable” are Stablecoins?” published on 31 May 2022. Here are 5 similarities between the two articles.
1) We both agree that Tether (USDT) can be the next to fall.
2) We both agree (indirectly) that Tether (USDT) is stronger than Terra (UST) because it is backed by US Dollar denominated reserves.
3) We both agree that Tether (USDT) is vulnerable to a bank run.
4) We both agree that the key reason for its vulnerability is the commercial paper in its reserves, due to its illiquid nature.
5) We both agree that even though Tether (USDT) has survived the initial bank runs, it doesn’t mean that it will survive future ones.
The conclusion is the same as my other article. If for any reason, you’re holding on to USDT, perhaps it’s time to convert them to USDC!