Point-blank question: which is the most used cryptocurrency in the world? But bitcoin, without a doubt … But no, surprisingly the most used is Tether, a stable coin. To say it is the volume of daily exchanges recorded by Coinmarketcap: those in tether a few days ago exceeded 22 billion dollars, while bitcoin had to settle for 19 billion and broken. Warning: this does not mean that bitcoin is not the most widespread cryptocurrency.
It still is with a market capitalisation of 130 billion. The tether is 30 times smaller. But it is a fact that in April tether has surpassed bitcoin by volume of daily exchanges and has not stopped since then.
What is Tether? Tether (USDT) is a stablecoin, i.e. a cryptocurrency that reflects the value of the US dollar. Its prices do not fluctuate like those of bitcoin or traditional cryptocurrencies, but remain more or less stable. This on paper makes tether more suitable for small digital payments and is its strength: as we have said, there are those who in countries subject to strong monetary devaluation look favourably on stable coins, because they act as digital money, without having to go through a bank and above all without suffering the anxiety of the sudden changes in the bitcoin market.
Tether was born in 2015 and is managed by a private company, Tether Limited which obeys the offshore rules of the British Virgin Islands but has a (not too clear) link with the Bitfinex exchange , which is based in Hong Kong. And it is precisely geography to play in its flavor: unlike bitcoins, born and developed in the US, tether has its roots in Asia and this not only makes it out of the reach of the American government but, as Bloomberg writes, “In countries like China, where cryptocurrency exchanges are prohibited, people can pay cash over the counter to get tether with few questions. From there, they can exchange tether for bitcoin and other cryptocurrencies.”
But all that glitters is not gold. Critics argue that there shouldn’t be such a close relationship between an exchange like Bitfinex and a democratic currency. Some have even speculated that tether is being used to manipulate the bitcoin market. And the concern has been raised that Tether Limited does not actually hold enough US dollars to support all the digital coins in circulation: an essential condition for every stable coin. These rumors have been around for several months, carrying fears that if Tether turns out to be a bluff the whole cryptocurrency market would suffer the backlash. But according to Tether Limited, these accusations are but an attack on the growth and success of their stable coin.
Sooner or later the mystery will be solved. In the meantime, tether proceeds swiftly to conquer the digital payments market, preparing to challenge Libra, Facebook’s stable coin that should see the light in June 2020.