Tether, the stablecoin, could collapse, he blamed Deutsche Bank

Stablecoin giant Tether has slammed Deutsche Bank over a newly released report suggesting that stablecoins — including dollar-peg token Tether (USDT) — could witness a “peso moment” that could wreak havoc on the crypto industry.

In a May 7 report on stablecoins, Deutsche analysts noted that the Terraform Lab algorithmic stablecoin could lose at least $40 billion from the market in a few days. Stable Coin Products.

In a study of 334 currency pegs over the past 223 years, analysts found that 49% of fixed-income currencies fell within their median lifespan of roughly eight to 10 years.

The analysts concluded that most of the stacked assets in the crypto space would experience significant “turbulence” stemming from speculative sentiment and eventually undergo some sort of reversal event.

“While some may survive, most will fail, especially due to the lack of transparency and vulnerability of stablecoin operations.”

Deutsche Bank analysts also cited the lack of transparency regarding Tether's stock and described the company's solvency as “questionable.”

However, Teter said the Deutsche Bank report “lacks clarity and concrete evidence” and is based on “vague rhetoric rather than solid analysis.”

In comments shared with Cointelegraph, a Tether spokesperson said that while the report attempts to predict the fall of the stablecoin, it “fails to provide concrete data to support its claims.”

“Furthermore, the comparison to Terra, an algorithmically stable coin, is misleading and irrelevant to the discussion of reserve-backed coins,” Tether replied.

“It seems ridiculous to question the credibility of any financial institution, especially one with the history of Deutsche Bank. Deutsche Bank's history of fines and penalties casts doubt on its own position to criticize others in the industry.

Related: Cryptocurrency is the ‘best innovation' since fiat – Tether co-founder

Tether has been criticized for its reserve transparency.

However, the firm has released several financial certifications, which suggest the firm holds more than $110 billion in fiat-denominated reserves – although some critics argue that is not the same as a financial audit.

An audit is conducted to look for information, risks, or compliance that may not be known before the audit, whereas verification is a simple tool used to capture a snapshot of some information.

In the year In 2021, the New York Attorney General agreed to pay Tether $18.5 million in fines and bar it from operating in the state for misrepresenting the level of fiat-backed stocks in the state.

In the year Cantor Fitzgerald CEO Howard Lutnick said he believes Tether “has the money” on hand, although it has not released an official audit since the firm was founded in 2014.

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