Welcome back dear traders and investors!
Have you ever heard or used the stable coin nicknamed "Tether" or "Dollar Tether"?
Recently the news has created a new focus of deep and clearly informative interest regarding what is happening in the scenario of the dollar tether, its monetization, production and circulation.
The problem evokes an economic critique based on one of the most important laws of the current or traditional school, intertwined with monetization. Deriving from the lack of support for the stablecoin which continues to be produced without an established or healthy order, but rather artificial.
The stablecoin that came to life in 2014, which in turn has abundant rates of use in transactions, is jointly one of the most discussed controversies in cryptocurrencies of the moment, since today it is located in the fifth place of the best cryptocurrencies in the top 100 of coinmarketcap. The currency created by Brock Pierce, Reeve Collins and Craig Sellars acquired a certain liking among traders, Bitcoin miners and market investors, thanks to the fact that it allows stability as one of its most justifiable premises. That is, the moment we exchange our currencies (whatever it may be) for the Tether, we arrive at the idea of "stability or freezing of funds" since changes or market fluctuations in supply and demand will not affect our funds.
Cointelegraph statistics show that more than 75% of users entwined with cryptocurrencies have used the tether as a model of financial protection. But all this begins to generate some discord when we learn publicly that the company that is producing the currency is ignoring one of the most important laws in classical economics "Financial support or the representation of funds through a form of materialization".
The Marxist school of economics refuted that the representation of any type of fund or currency should be made with gold, however, the viability of supporting gold has not always been anchored in the history of some current currencies. As for example the US dollar that corresponds to a confidence endorsement. The contradiction of this economic theory would be the Euro that has complied with said regulations, and curiously has an added value over the dollar. However, Tether's financial problem is not directly related to the representation of funds in gold, that would be incoherent from a modern point of view; Cryptocurrencies have always embraced trust as a backup mechanism, but in this case not only trust is enough, that is, each fund must be justified in the issuing body, otherwise, it would be liquid money, without value, without support in itself.
The sanctions are on the table, and consequently they are talking about the well-being of the funds and the users who own them. The issuing company of the Tether must respond to the economic organizations that demand the representation and justification of each issued fund, to avoid the creation of liquid currencies, circulating without material value. For this reason, some traders have begun to displace the Tether as a protection mechanism, because it is unknown what could happen if they do not take close determinations in the face of the controversy.
What can happen in the short and medium term?
In case they do not consider responding to the economic accusations and begin to justify the funds that are issued, then the aptly named "stablecoin" will begin to break ties with cryptocurrencies that allow the exchange, or they will begin to block some of the funds with the objective that users migrate from the same to another such as "DollarTrue" and many others.
In the event that they do manage to mediate the situation, the stablecoin will continue to be a market favorite due to its trajectory and relationships with other cryptocurrencies.
The end of Tether?
It is too early to announce the death or the end of the stablecoin due to its implications or legal problems, on the contrary, it is something that has a solution, only that it must be addressed, do not be carried away by alienated comments and third parties who want to create hilarious scandal, I have Faith in the problem of issuance without justification or support of the stablecoin could originate in the worst case "inflation" but never the end of the Tether as we know it.
What should I do if I have money or funds invested in Tether?
If you are a lover of the Tether project as one of the first Stablecoins in the market, then you have nothing to fear, if on the contrary fear or speculation exceed your confidence, you can exchange your Tether funds for another Stablecoin while they are exceeded the legal problems of the company based on its production.
Do you want to read Tether's project? Here you have it!
https://coinmarketcap.com/currencies/tether/
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