As a stablecoin issuer, how does Tether ensure the stability of its digital currency?

3 answers

• May 02, 2022 · 3 years ago
  Tether ensures the stability of its digital currency by maintaining a 1:1 ratio between its issued stablecoins and the corresponding fiat currency reserves. This means that for every Tether stablecoin in circulation, there is an equivalent amount of fiat currency held in reserve. This ensures that the value of Tether remains stable and pegged to the value of the underlying fiat currency.
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• May 02, 2022 · 3 years ago
  To ensure stability, Tether regularly undergoes audits by reputable third-party firms to verify the amount of fiat currency held in reserve. These audits provide transparency and assurance to users that Tether is indeed backed by the claimed amount of fiat currency, further strengthening the stability of the stablecoin.
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• May 02, 2022 · 3 years ago
  As a stablecoin issuer, Tether ensures stability through various mechanisms. One such mechanism is the use of market-making activities, where Tether actively participates in the market to maintain the stability of its stablecoin. This involves buying or selling Tether on exchanges to counteract any fluctuations in its price and maintain the peg to the underlying fiat currency. These market-making activities help to stabilize the value of Tether and ensure its stability in the digital currency market.
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