Exchange UpBit Promises to Back USDT with Dollars in a Private Security Deal
USDT tokens have spread to many exchanges, due to the need to move funds globally without restrictions inherent to fiat.
In a recent message to investors, shared by CryptoKorean, the UpBit exchange calmed investors down that it would back Tethers:
https://t.co/wRvFQcXysM— Crypto Of Korea (@CryptoOfKorea) February 7, 2018
UpBit’s stance on Tether is announced:
"We are aware that there are various suspicions related to Tether," said an UpBit official.
"We will compensate the same amount of money to customers who have USDT on our exchange even if there is a problem."
The printing of Tethers stopped in January, and for now no new tranches of fixed-price tokens have been issued. Yet there are now more than 2 billion USDT outstanding, and those are being traded twice over every 24 hours.
The Tether company and Bitfinex have refused to provide proof that all USDT coins are backed by currency, and there has been talk that the backing may be in the form of other tokens. But now, UpBit has extended its own private promise to provide liquidity to Tethers circulating on the exchange.
In 2018, exchanges are extremely successful and possibly cash-rich, so they would have no trouble to ensure their trading has backing in fiat. Recently, CoinCheck, the Japanese exchange, managed to provide the funds to cover quite steep losses after the theft of NEM (XEM) coins.
Ethereum Gets Tethers
Ahead of the launch and growth of the newly created Ethfinex exchange, new Ethereum-based Tether tokens have been created. At this moment, the address holding or generating the EURT displays a balance of more than 86 million EURT.
The USDT smart contract address also reveals a recent printing, with more than 60 million USDT available on the Ethereum blockchain.
By popular demand, now tracking EURT as well. Previous prints will not be posted, but future supply increases and decreases will be.— Tether Printer (@tetherprinter) February 8, 2018
The extra liquidity in fixed-price tokens may boost the price of Ethereum, especially if new printings follow the recipe of boosting Bitcoin. In addition, allowing margin trading for select
Ethereum-based tokens may greatly boost prices. The Ethfinex effect could be felt sharply in 2018, as previously slow-moving tokens see margin trading.
But what is even more curious is that the dollar value of EURT and USDT assets is given as $0.00 by Etherscan. Presumably, the assets would be fixed at 1 EUR and 1 USD.
And if 2018 turns out to be "the year of Ethereum", it may take some close watching of the printing wallets, to mark the effect of creating USDT liquidity on Ethfinex.