Stablecoin USDT loses its peg to the dollar

The popular stablecoin Tether (USDT), pegged to the US dollar, unexpectedly fell in price today. According to TradingViev, at the time of writing, the USDC/USDT exchange rate was $1.0029. This means that Tether’s stablecoin fell by 0.3%.

This happened due to imbalance stablecoins at Curve 3Pool, one of the leading stablecoin trading pools in the decentralized finance (DeFi) sector.

In theory, in Curve 3Pool, each of the three stablecoins USDT, USDC and DAI should account for 33.33% of the funds. However, for some reason, the USDT balance rose to over 70%. This sudden balance shift indicates that traders were actively selling USDT for DAI or USDC, which consequently caused USDT to decouple from the US dollar.

Tether CTO Paolo Ardoino believes that the imbalance indicates tension in the cryptocurrency market. He linked the increase in the outflow of funds from Tether with the growing negative around the cryptocurrency market.

USDT is issued by Tether Limited, which claims that each USDT token is backed by 1:1 US dollar reserves. USDT, like other stablecoins, is used as a way to protect against fluctuations in the crypto market due to its stability. For the peace of mind of its users, Tether regularly publishes audit data confirming that the company’s assets still allow for a peg to the US dollar.

Nevertheless, this very binding has long been a healthy skepticism in the ranks of kryptans. Doubts about the veracity of published reports and audits arise because the numbers for them are provided by the issuer of the stablecoin, and not by the audit firm.

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