Tether has been one of the most contentious issues in cryptocurrency over the last several years, and that hasn’t changed as use has increased. While the term “decentralisation” is not used once in Satoshi Nakamoto’s Bitcoin whitepaper, it has been a central identity to bitcoin and cryptocurrency in general from its near-inception.
Of fact, decentralisation is a critical component of just one of the several questions surrounding Tether. However, this week’s focus is squarely on that, as Tether announced the freezing of around $160 million worth of stablecoin USDT. Consider what we do know.
Three Ethereum-based USDT addresses with a combined value of more than $150 million were blocked this week, according to Tether authorities, citing “a request from law enforcement.” Since November 2017, the blockchain has banned approximately 560 addresses. This was Tether’s first blacklisting move in 2022.
Tether representatives previously stated that “by freezing addresses, Tether has been able to assist in the recovery of funds stolen by hackers or compromised,” igniting heated debates within the crypto community – which has largely embraced decentralisation – over the extent to which blockchain authorities should be able to wield power over the network. Long-time crypto enthusiasts are usually unenthusiastic about Tether’s market dominance – even if the final result is the replacement of cash lost due to the conduct of wicked criminal actors.
Additionally, recent US government investigation of stablecoins – most notably USDT and USDC – has potentially resulted in significant development of more decentralised alternatives, most notably UST and DAI – the market’s third and fourth biggest stablecoins, respectively.
Stablecoins such as USDT have gained in popularity with the larger cryptocurrency markets; yet, greater scrutiny from crypto enthusiasts has left many questioning about the network’s appropriate level of authority. USDT on TradingView.com is a CRYPTOCAP product.
To be sure, Tether is clearly caught between a rock and a hard place. The market value of the top stablecoin is quickly nearing $100 billion, and it is salivating at the prospect of securing its status as the ‘go-to’ stablecoin in an era of tremendous crypto development.
Additionally, a Chainalysis analysis found that criminal activity and cryptocurrency-related crime substantially increased in 2021 compared to 2020, indicating that government authorities are expected to increase their connection with the blockchain.
As we begin the new year, anticipate more of the same from Tether and, maybe, Circle’s USDC — as the two companies seek to ingrain crypto in more mainstream channels, some degree of centralization is unavoidable.
Also Read: Ripple Can Access Emails Regarding SEC Ethereum Speech, Judge Rules
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