Tether will stop issuing loans secured by USDT
In response to a recent media attack, Tether, the issuer of the USDT stablecoin, said it would reduce secured loans in USDT reserves to zero over the next year.
Tether explained that stablecoin-backed loans work similarly to loans from private banks that use collateral. However, unlike banks that operate with fractional reserves, Tether loans are more than 100% secured, the company claims.
“Tether is managed professionally and conservatively, and this will once again be demonstrated by the successful completion of the lending business without loss, as all loans are backed by liquid assets,” the company said.
