Tether capitalization exceeded $ 15 billion in the wake of DeFi-hype

CONTENT

  • Tether’s (USDT) Aggregate Market Capitalization Crosss $ 15B for the First Time

  • Rising interest in the DeFi industry is behind the rise of stablecoin

  • Tether Legal Trouble Poses Threat to DeFi Market

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Tether’s total market capitalization (USDT) crossed the $ 15 billion mark for the first time. A growing market for decentralized finance (DeFi) Decentralized finance (DeFi) is a financial services built on blockchain technology that offer users access to an open, efficient and … More) controversial stablecoin.

In the last month alone, the USDT market has grown by almost $ 3 billion. Some market observers are worried about the rapid growth of stablecoin and its use in DeFi protocols..

Unresolved legal issues could lead to the application of appropriate action against the company that owns the stablecoin Stablecoins – literally translated from English “stable” coins – continue to gain popularity in the digital asset market. With … More. At the same time, recent events only underline the decentralized nature of Tether due to the company’s control over various aspects of the network..

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Explosive growth in Tether use

Now the capitalization of Tether (USDT) exceeds $ 15 billion. Integration of the leading stablecoin with the Aave, Compound, and more recently Solana protocols serves as a key driver of the coin’s growth.

On August 26, Tether’s market capitalization crossed the $ 13 billion mark, while the $ 11 billion mark was recorded in the first week of August. Moreover, in the category of weekly transaction volumes, the digital currency pegged to the dollar actually outstripped Bitcoin..

Tether is growing due to its symbolic linkage to the decentralized finance segment, which gives users the ability to interact with decentralized financial protocols, limiting their risks associated with cryptocurrency volatility..

Thanks to this link, the USDT market is growing in tandem with the total volume in DeFi protocols, which, according to DeFi Pulse, was $ 6.386 billion as of August 17..

A month later, that figure rose to $ 8.9 billion. Over the same period, Tether’s capitalization increased from 12.3 billion, exceeding $ 15 billion.

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The growing importance of Tether in the DeFi market

However, some market observers are concerned about the growing importance of Tether in the decentralized finance industry. Tether recently demonstrated its control over USDT after a user sent $ 1 million USDT to the wrong address..

Tether returned this amount by blacklisting the addresses involved in the missing coins. It turns out that if Tether can correct DeFi transactions, then most likely the project can also control aspects of the stablecoin at the request of law enforcement agencies..

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Tether capitalization exceeded $ 15 billion on the wave of DeFi-hype

Given the regulatory vacuum the DeFi segment is currently in, it could pose a problem if regulators tighten the screws in the market in the future, especially since Tether has a reputation for being one of the most controversial projects ever..

The company and its sister firm, represented by the Bitfinex exchange, have been “on the pencil” by the New York prosecutor’s office since April last year, when a publication appeared on the agency’s website accusing Bitfinex of concealing the loss of $ 850 million in user funds at the expense of Tether stablecoins.

Unresolved legal issues

The attorney general’s office said this month that after 17 months of delays, it is time for Tether to respond to its financial disclosure request. The company’s lawyer responded by saying that USDT users are “well protected” and that this request is not necessary. Tether also stressed that thanks to Bitfinex payments and the growth of USDT, the stablecoin is fully backed by reserves..

But some users think differently. As you can see from the discussions on the Maker DeFi forums, users are aware of the financial risks associated with this project. Also, given Tether’s increasingly close relationship with the DeFi space, the final verdict of New York’s attorney’s office could have a significant impact on the industry as a whole..

At the same time, Tether’s continued growth underlines that users are not overly concerned about the legal issues affecting the project. According to Twitter user CasPiancey (@CasPiancey), USDTs in circulation surged by nearly $ 1 billion in days after Bitfinex responded to the Attorney General’s request..

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Tether capitalization exceeded $ 15 billion on the wave of DeFi-hype
Tether capitalization exceeded $ 15 billion in the wake of DeFi-hype
Tether capitalization exceeded $ 15 billion on the wave of DeFi-hype

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