TechFlow news, on May 23, Tether issued an official statement explaining that the premise of stablecoin stability is that each stablecoin can be redeemed at a fixed value. USDT and Terra differ completely in design, mechanisms, and collateral. Terra was an algorithmic stablecoin with mechanisms intended to maintain stability, but ultimately failed. In contrast, USDT is fully backed by collateral, with every USDT redeemable for one U.S. dollar.
When the price of USDT on an exchange deviates from one dollar, it only indicates that user demand for liquidity exceeds the order book depth of that exchange, not that USDT has de-pegged. Tether holds over $70 billion in collateral to support USDT redemptions and meet user liquidity needs, and can fulfill redemption requests exceeding 10% of the circulating USDT supply within days.
Additionally, Tether announced that over 55% of USDT's reserves consist of U.S. Treasury bonds, while commercial paper accounts for less than 29%.
