Decrypt’s Art, Fashion, and Entertainment Hub.
The troubled US-dollar-pegged stablecoin Tether launched today on the Algorand blockchain. Algorand is a proof-of-stake blockchain network that promises high transaction speeds and low fees.
"A key strength of Tether is that it is underpinned by a rich diversity of different blockchains," said Paolo Ardoino, CTO at Tether, in a statement. "Our latest collaboration with Algorand leverages the speed and security of Algorand's protocol to give traders fast settlement and reduced counterparty risk in their fiat to digital asset transactions,” he added.
Tether also works with Ethereum, EOS, Liquid Network, Omni, and Tron. Its market cap is over $4 billion, and trades worth almost $50 billion occur each day. At the end of last month, Tether launched Tether Gold, a stablecoin purportedly backed by physical gold stored in a Swiss vault.
Rumors of Tether's launch on Algorand have been circulating for the last two weeks. During that time, daily trading volume for Algorand's ALGO token has risen from around $40 million to over $110 million. The value of the ALGO token has also increased; in the past week, it’s gone up from around $0.25 to $0.35 per coin.
Still, Algorand and Tether both currently face substantial uncertainty. Algorand’s token price has dropped 90% since it first launched in mid-2019 to much acclaim. Meanwhile, Tether is under investigation by the New York Attorney General, which alleges that its sister company, Bitfinex, drew funds from Tether's reserves to mask an $850 million hole in its finances.
Though the allegations against Tether have brought considerable negative attention to the company from outside of the crypto bubble, including critical articles from The New York Times and The Wall Street Journal, they have done little to lessen the cryptocurrency industry’s dependence on the stablecoin.