Feyisayo Ajayi 
Tether, the world’s largest stablecoin, which is meant to be pegged 1-to-1 to the U.S. dollar has lost its peg to as low as 95 cents this morning after another stablecoin, terraUSD, fell below 30 cents on Wednesday, raising fears in the market contagion.
TerraUSD, or USD, differs from the tether in that it supports its ostensible peg to the dollar with code rather than funds maintained in a reserve.
Some traders were exploiting the drop in tether by buying the token for less than $1 and then redeeming it for a dollar. Tether and USDC, the two biggest stablecoins, are meant to be backed by a sufficient amount of money held in a reserve.
Tether’s token holders will receive $1 when redeeming their tokens. Tether has reduced the amount of commercial paper in its reserves and says it plans to lower its holdings further over time.
Cryptocurrency firm Tether says it is on track to process more than $2 billion in redemptions Thursday. Around 300 million tether tokens were withdrawn in the last 24 hours “without a sweat drop,” co-founder Mike Torvalds said.
This report’s information was first seen on cnbc.com; to read more, click this link.
