USD-pegged Stablecoin issuer Tether is looking into releasing a new version of the digital currency backed by a basket of commodities including gold, crude oil, and rubber, Zhao Dong, the outspoken investor of Bitfinex, revealed.
Reported by Cointelegraph, the stablecoin issuer is considering the move to mitigate the risks associated with the storage of fiats in banks.
Launched in 2014, Tether is the leading fiat-pegged digital currency in the market with a market cap of over $4 billion. The token was adopted by most of the crypto exchanges to circumvent the regulatory needs of offering fiat-based services while providing a similar experience to traders due to the stable nature of the cryptocurrency.
No proper response despite serious allegations
The firm, however, is laden with controversies with several allegations of not maintaining enough fiats in its currency chest. Last year, one of the general counsels of the firm joined the accusers to point out that the stablecoin issuer is not backing its coin at promised 1:1 ratio.
The company also made headlines after granting a $700 million loan to its sister company Bitfinex, which was made public by the New York Attorney General’s office earlier this year.
Dismissing all allegations, Dong told the publication: “Tether is fully backed by reserves, out of 4 billion existing USDT about 3.35 billion are now in securities and 650 million are being lent to Bitfinex. Bitfinex has been raising 1 billion with it's LEO token IEO and could easily pay back Tether any time (as a matter of fact it already paid 100 million last month).”
“Even if you don't calculate this 650 million as reserves the total amount backed by USD is 83.75% (3,350/4000) and not 72% as fake news are reporting.”
Bitfinex already started to repay Tether its outstanding loan and transferred $100 million in July. However, according to Dong, the current priority of the crypto Exchange is to recover the losses incurred by it to its payment processor Crypto Capital.
Meanwhile, Tether is also planning to launch another fiat-pegged stablecoin that will be backed by the Chinese yuan.
“CNHT will not interfere with PBOC capital control policy because CNH is different than CNY, as it's already an offshore product. On the contrary, CNHT will help China to expand the adoption of CNH for international settlements,” the Bitfinex shareholder added.
