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Tether refutes Deutsche Bank research revealing stablecoin solvency risks

Tether said that Deutsche Bank's analysis "lacks clarity and substantial evidence" and led to vague assertions.

Tether refutes Deutsche Bank research revealing stablecoin solvency risks

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Deutsche Bank research analysts have released a report suggesting that most stablecoins, including Tether, are likely to fail due to a lack of transparency and vulnerability to speculative sentiment.

The report, which studied 334 currency pegs since 1800, found that only 14% have survived, with a median lifespan of 8-10 years for those that failed or were discontinued.

The analysts expressed particular concern about Tether, citing its “monopoly in the stablecoin market that has been filled with speculation and lack of transparency.” They also pointed to Tether’s alleged history of misleading claims on reserve holdings, which led to $41 million in fines by the Commodity Futures Trading Commission (CFTC), and the reliance on Tether in the crypto derivatives market, which could magnify losses and blow up levered trades.

In response, Tether criticized the Deutsche Bank report, stating that it “lacks clarity and substantial evidence, relying on vague assertions rather than rigorous analysis.”

The stablecoin firm argued that the report failed to provide concrete data to support its claims and that the comparison to the collapsed algorithmic stablecoin TerraUSD was misleading and irrelevant to the discussion on reserve-backed coins.

Tether also questioned the credibility of Deutsche Bank, citing the bank’s own history of fines and penalties. The firm has released several financial attestations suggesting that it holds over $110 billion in fiat-denominated reserves, although critics argue that these attestations do not count as actual financial audits.

Despite the ongoing debate surrounding Tether’s transparency and the broader risks associated with stablecoins, some industry leaders, such as Cantor Fitzgerald CEO Howard Lutnick, have expressed confidence in Tether’s reserves.

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