Key points
- A Tether USDT de-peg has sent a shockwave across the crypto market as Curve 3Pool seems to be in distress.
- USDT’s value plummeted to slightly under a dollar, but issuing company, Tether, says it is ready to buy back any amount while it works on restoring the peg
Tether’s USDT traded on a discount of up to 0.25% on June 15, 2023, due to imbalances in Curve 3Pool. Curve 3Pool is one of the most popular pools for stablecoin trading in decentralized finance. Therefore, a miscalculation or imbalance of reserves can affect its stablecoins.
Tether is ready to buy back any USDT amounts to restore the peg
Tether Chief Technology Officer (CTO), Paolo Ardoino, has talked about the dip, saying that the imbalance in Curve 3Pool indicates a broader tension in the crypto market. In an interview with The Block, he expressed that Tether is a liquidity gateway in the crypto industry; when bull markets set in, they see inflows, and when a bear cycle occurs, outflows increase.
“Tether is the gateway for liquidity, inbound and outbound. So when the interest in crypto grows, we see inflows; when the sentiment on the crypto market is negative, we see outflows.”
It is not the first time that Curve 3Pool has had an imbalance. In March 2023, the pool had a similar issue where the balances of DAI and USDC stablecoins exceeded 45% of each. Also, in November 2022, after the collapse of FTX, the volatility in the pool was highly noticeable same as the Terra ecosystem collapse.
Despite the current situation looking ugly for a struggling market, Ardoino has said that the company is closely monitoring the situation and will have a remedy sooner than later. Keep watching Fintech Express for more updates on crypto and other fintech-related news and developments.