Of all the stablecoins out there, I use Tether the most, but that's just because of a lack of better alternatives.
Other analysts discussed the value of tether to support crypto trading activity, so I won't review that part. Instead, here are some macro-economics that could have major impact on Tether.
Most risks are associated with the US dollar itself, not directly to Tether:
- US dollar suffer inflation every year, so it's an absolute shitcoin in all respect. See image below of the purchasing power of a $1 USD over time. The more the US economy suffer, the more printing will occur, the only thing saving the dollar is other countries' population relying on owning US currency has a hedge against their own currency demise.
- There is a growing coalition of countries currently working on diminishing the use of US currency as international trade settlement. Are those countries serious about abandoning the dollar, or they are just applying pressure to negotiate better trade deals?
- The USD strength is directly proportional to the strength of the US government. Will the US be the next roman empire and collapse? In which case Tether could massively suffer, but how many decades or centuries would this collapse occur? I prefer to live in Asia than North America, I believe lots of qualified experts are moving out of silicon valley.
- CBDC and FedNow: the US government may not want to allow external organizations to control US currency. They may actually regulate against Tether and any other stablecoin companies in favor of pushing CBDC or the FedNow program to replace stablecoin under the control of the central bank. USDT could be destroyed (depegged) as soon as July 2023. In this scenario, US currency prevail, but Tether does not.
Overall, there are currently no other world currency anywhere close to be widely accepted. Every crypto currency on the market needs to be paired against another currency for trading to occur, hence why USDT is so useful. I can't wait to see an asset that replace it, which I refer to stablegrowth tokens. Show Less
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