Shortly before the Hard Fork in early August, an Underdog stormed the Top-Lists on CoinMarketCap. With the fourth Place among the most traded Cryptocurrencies, Tether (USDT) secured a firm Place ahead of Dash, Monero and other Currencies found in the Top 10.
The Mapping of a Fiat Currency
Since no one could really foresee the Effects of the forthcoming Fork, many Users swapped their Cryptographic Currencies for Tether. Even today, the Digital Currency is ranked nineteen on CoinMarketCap and has a total of over 390 million Tokens - which for most Users means 390 million US dollars, as Tether linked the Price of a USDT to the US Dollar.
The Question that many People are currently asking themselves is: does this link make USDT a real US Dollar?
At least the Company States behind Tether that it owns Dollar deposits for each Tether, so it could be assumed that you could exchange Tether for real US Dollars.
A Controversy arose recently about a Section in the Legal Section of Tether's Website:
- Once you own Tether, you can trade, keep or use it to pay People who accept Tether. But Tethers are not Money or a Financial Instrument. It is also not a stored Value or Currency. There is no Contract Law or any other Law, nor is there a legal claim to Cash out or Exchange your Ether for Money. We also do not guarantee the right to Cash out or Exchange a Tether on our Site for Money. There's no Guarantee of loss if you buy, trade or sell Tether."
The Company does not designate its cryptocurrency (if it is one at all) as money. There is also no right to be paid out under this paragraph. If one also considers then that millions are exchanged daily between money and "non-money", then one understands the following criticism.
Collateral
After Rumours of a few Cutbacks in Connections to Wells Fargo and a Taiwanese Bank were heard, the Community requested Audits to confirm the US Dollar Reserve.
Indeed, last Night the Company issued an Official Statement on the outstanding Audits. However, the Problem here is that the last Audit was carried out in March and several hundred US Dollars have been reissued by Tether since then.
The Statement states that the Audits are only of Interest to Shareholders and therefore not suitable for the Public. Nevertheless, Tether published the last four Audits, the last being the Audit dated March 31,2017.
After furious Accusations against Reddit that Tether's Policy could theoretically harm Cryptocurrencies, Tether corrected his Position on his own Terms of Service. A Payout is still possible, but limited:
- We have a Duty to Ensure that our Service is not used by any Person originating in sanctioned Countries, otherwise Subject to Sanctions or not able to provide Background Evidence. In Short, Payouts are not denied for no Reason, but we reserve the Right to decide on each Case individually."
For Crypto Enthusiasts, this is a Knockout Criterion. There is no Security, a temporary Exchange in USDT is therefore fraught with a high Risk, because the Terms of Service protect the Rights of the Tether Company, but do not grant the Owner of a USDT Token any Rights.
USDT is therefore not the same as the US Dollar. But one Thing has now become clear from the continued Existence of Tether: Traders need a Token that reflects the US Dollar. Maybe someone will develop a "real" Alternative in the Future.
