Eight years ago, on October 6th, 2014, Tether launched USD₮ for the first time. Things were very different then.
Tether USD₮ was initially issued in one place – the Omni Layer on top of Bitcoin. While Bitcoin served as the progenitor of USD₮ tokens, they quickly spread to other blockchains which emerged due to tremendous interest in the technology underpinning Bitcoin and Tether. USD₮ tokens are issued on 14 different chains today.
Tether invented the very idea of a stablecoin eight years ago. In less than a decade, stablecoins went from a proof of concept to over $100 billion dollars worth of issued assets which are used and circulated at high volumes.
USD₮ didn’t just grow to be the dominant stablecoin issued on most major blockchains, it grew in size as well – rapidly! Within one year from the first issuance, there was slightly over 450,000 USD₮ in circulation. A year after that it was close to 7,000,000 USD₮.
Total USD₮ issued hit 2 billion by the end of 2018 and by 2021 this number was over 60 billion.
Tether continues to punch far above its marketcap in terms of trading volume as well. The daily trading volume of USD₮ far exceeds all other stablecoins together, usually approaching or surpassing the total marketcap of USD₮. This is a remarkable achievement and a testament to both the liquidity and demand for USD₮.
USD₮ is the primary currency all of crypto is trading against and is used to price the majority of derivatives which are an important component of the crypto ecosystem.
The growth of USD₮ rivals the most successful growth stories of modern companies. While a true comparison is impossible due to the differences between USD₮ and a corporation, on its 8-year anniversary Amazon had reached a valuation of close to $20 billion. Tether currently has grown to a total marketcap of $68 billion.
To call Tether’s invention a success, is an understatement. Tether transformed how people around the world access US Dollars.
In many countries around the world, USD₮ has become a financial lifeline for people faced with challenging circumstances, financial repression, or corrupt regimes. USD₮ is a tool for financial freedom in
Turkey
,
Myanmar
,
Argentina
, and many other countries.
Tether Reserves Update
Tether has always been committed to ensuring that every USD₮ is backed 1:1 with conservative, liquid, and high-quality collateral. As market conditions evolve, the options for Tether’s collateral evolve with market conditions.
While Tether previously held A-rated commercial paper as part of its reserves, Tether has been in the process of converting these commercial paper holdings into US Treasury holdings over the course of this year.
The dynamics in US Treasuries have changed tremendously over the course of 2022, and they represent the ideal conservative, liquid, and high-quality collateral today.
As promised, Tether will once again demonstrate a commitment to transparency in our next quarterly attestation. Portfolio updates will include a reduction in commercial papers, now making up less than $50M of its reserves, and the holding of 58.1% of its assets in US Treasury Bills.
It is critical to note that Tether was able to complete this conversion with no incidences of drawdown or loss. This was possible because Tether has always selected the highest quality collateral, regardless of whether this collateral was commercial paper or US Treasuries.
Tether was also able to process redemptions for billions of dollars of USD₮ during the crypto market drawdown with ease while continuing to convert its commercial paper holdings to US Treasuries.
With this upcoming report, Tether will continue to validate the business, and the strength of its reserves and further solidify its position as the industry’s leading stablecoin.
Tether’s first attestation showing a breakdown of the composition of Tether’s reserve assets was published in June of 2021. By September 2021 Tether reached a marketcap of $69 billion dollars and held over $30 billion dollars of commercial paper in reserves.
In little more than a year Tether was able to convert practically the entirety of these reserves into US Treasuries. Tether continues to do what its critics say it can’t do, and what they say it won’t do.
We look forward to continuing to prove them wrong. Here’s to the next eight years and more!
