Key Takeaways
- Tether’s banking partner, Deltec, has announced a BTC investment, provoking speculation about Tether’s reserves.
- Tether’s General Counsel, Stuart Hoegner, says that Deltec’s activities are separate from Tether’s own reserves.
- USDT is backed by U.S. dollars and other assets, not Bitcoin.
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Tether has strongly implied that its USDT stablecoin is not backed by Bitcoin, following unclear statements from its banking partner Deltec.
Deltec Invests In Bitcoin
Hugo Rogers, Chief Investment Officer of Deltec Bank, recently announced that his firm invests some customer funds in Bitcoin. Because Tether is one customer of Deltec, some news reports provoked concerns that Tether’s reserves may contain Bitcoin.
However, Deltec’s investments and Tether’s reserves are clearly independent of one another. Coindesk, one of the first sites to report the news, states that a Tether representative “denied that any of those funds [invested in Bitcoin] were Tether’s.”
Furthermore, Stuart Hoegner, general counsel for Tether, released a public statement on Twitter affirming that the two funds are not connected to one another in any way.
We are aware of recent statements by Deltec Bank & Trust Limited about the purchase of digital tokens for and on behalf of their customers. @Tether_to does not outsource decisions about its reserves. Deltec does not purchase digital tokens for and on Tether’s behalf.
— Stuart Hoegner (@bitcoinlawyer) January 15, 2021
Samson Mow, CTO of Blockstream, also commented on the news. Mow explained that “Deltec offers investment management services and [manages] portfolios of their customers.” He added that Deltec is not “taking customer funds arbitrarily to buy Bitcoin.”
USDT Not Backed by Bitcoin
According to Tether’s website, the USDT stablecoin is 100% backed by a reserve of U.S. dollars and other assets, including “traditional currency and cash equivalents and, from time to time…other assets and…
