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ARTICLE · 27 OCTOBER 2021

Is Stablecoin Stable? Media And Regulators Raise Concerns

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Tether – the world's largest issuer of "stablecoin" – has come under increased media and regulatory scrutiny in recent months as concerns over its liquidity have grown.

United StatesInsolvency/Bankruptcy/Re-Structuring
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Tether – the world's largest issuer of "stablecoin" – has come under increased media and regulatory scrutiny in recent months as concerns over its liquidity have grown.  This, in turn, has led to increased concerns regarding the risk that Tether, and other stablecoin issuers, pose to the crypto economy specifically and to the global financial system more generally.

A stablecoin is a type of cryptocurrency that, unlike its cryptocoin brethren, is pegged to the value of a fiat currency like the U.S. Dollar.  In Tether's case, each "tether" or "USDT" is backed by one U.S. dollar meaning that, at any time, the holder of a USDT is entitled to request one U.S. dollar, in exchange, from Tether.  Prior to 2021, Tether was a somewhat large, but otherwise unremarkable, stablecoin issuer having issued approximately 21 billion USDTs.  But, in 2021, Tether grew significantly, issuing 48 billion additional USDT for a total of 69 billion USDT outstanding.  Tether claims to be

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