Warning: Stablecoins Like Tether Could be at the Heart of the Next Financial Crisis

Tether is about as stable a stablecoin as it is transparent

Photo by DrawKit Illustrations on Unsplash

Whether or not you trade in cryptocurrencies, be forewarned: Stablecoins like tether could be at the heart of the next financial crisis. Industry leader, Tether Limited (owned by parent Tether Holdings Limited), may one day be in the eye of the hurricane. Here are six questions you need to have answered:

• What are stablecoins and why do they matter?
• How stable is tether?
• What is Tether Limited’s checkered past?
• What did a study find about the connection between bitcoin and tether
• What do we know about Tether’s reserves?
• Should we be concerned about tether and other stablecoins?

You may be surprised and even shocked by some of the answers. And spoiler alert: The answer to the last question is a resounding “yes!”

What is a stablecoin and why does it matter?

Stablecoins are cryptocurrencies that are designed to have relatively stable prices by pegging their value to an outside asset like fiat money such as the U.S. dollar, or a well-established reserve…