Tether, the world’s largest stablecoin issuer, has confirmed that USDT is risk-free on its Solana network.
On Nov. 18, Tether issued a statement stating that Alameda issuing USDT was safe from Domino’s in the wake of FTX’s bankruptcy.
According to Tether’s Transparency Report, Solana is the third largest network for stablecoins after Tron and Ethereum. There are 1.89 billion USDT on Solana, representing less than 3% of the total supply.
Not affected by Alameda
The company explains that USDT will issue on a 1:1 basis when institutional parties send dollars to Tether, and this is the case with Alameda for Tether on Solana, adding:
Those reserves remain in Tether’s possession, not on Alameda’s balance sheet, and the collateral to support Alameda’s USDT is not on Alameda’s balance sheet.
Alameda’s only option is to trade USDT and have Tether return the dollars, but Tether has confirmed that it has no outstanding stablecoin loans, reserves, or other funds to Alameda.
“The main problem that countless other firms are facing is that they lend Alameda assets based on very illiquid collateral.” which was a major factor in the collapse of FTX.
Source: LINK