“I’m quite pleasantly surprised how the markets are taking [the news],” said Trenchev. “Bitcoin being down 5% on the day is equivalent to the Dow Jones being flat on the day.”
Trenchev went on to add that he believes the reasoning for the tempered market response is likely due to two reasons: there are a number of additional stablecoin options and companies are finding more responsible ways to deal with the downside potential of Tether in their various financial products.
For example, Nexo’s Tether loan system works via a conversion protection guarantee where the company instantly sells the USDT to USD and holds onto the dollars for clients, eliminating the risk of the stablecoin going to zero when stored on the platform. Investors can earn up to 6.5% APY on stablecoins stored on Nexo platform, including TrueUSD (TUSD), USD Coin (USDC), Tether, Paxos Standard Token (PAX) and Dai (DAI).
Despite the damage that Tether continues to do to the overall image of the crypto industry, demand for stablecoins has not died down in light of the recent scandal. According to a report by CoinDesk, competing stablecoin Paxos had to print more than 10 million PAX in the 18 hours following the lawsuit.
In a separate statement provided to SludgeFeed, Paxos CEO Charles Cascarilla said, “The news reinforces our belief that regulation and oversight create confidence and stability for the industry and Paxos is proud of its NYDFS-granted trust charter, the highest form of regulation in the space.”
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.