Circle CEO Jeremy Allaire Slams Tether for Being Unregulated Offshore Banking Solution

News
Fri, 01/03/2020 - 18:20
article image
Alex Dovbnya
Circle CEO Jeremy Allaire openly shreds Tether for its lack of regulatory compliance while celebrating the success of USDC and stablecoins in general
Circle CEO Jeremy Allaire Slams Tether for Being Unregulated Offshore Banking Solution
Cover image via U.Today
Read U.TODAY on
Google News
Contents

Jeremy Allaire, the CEO of Circle, has shared some scathing critique of Tether (USDT), the leading stablecoin in the cryptocurrency industry. In his latest tweet, he describes it as an unregulated offshore banking solution for China whose main selling point is its non-compliance. 

Paolo Ardoino has responded to Allaire's criticism, claiming that Tether's greatest feature is, in fact, the ability to listen to its customers, adding that things didn't look good for Circle's USDC. 

Related
Circle CEO: Facebook Coin Is ‘Great Sign’ for Crypto

Edging out competitors 

At the same time, Allaire touted the success of the USDC stablecoin that was launched by Circle and Coinbase back in 2018. USDC is already among the 22nd biggest cryptocurrency with its market cap reaching $520 mln, leaving its closest rival Paxos Standard (PAX) far behind it. The latter had a hard time increasing its circulating supply throughout the year.

As reported by U.Today, Blockchain Capital predicted that the USDC could grow by about 300 percent in terms of market capitalization and trading volume, thus becoming one of the biggest winners of 2020. 

Gemini's GUSD and Binance's BUSD stablecoins are unlikely to see this kind of success this since, according to Allaire, they were already dead on arrival.      

Related
Circle CEO Doubles Down on His Call for Regulatory Clarity During Recent Reddit AMA

A double-edged sword 

USDC stands out as a regulated version of Tether that is fully backed by fiat and audited on a monthly basis. For comparison, Tether only 74 percent of all USDT tokens are actually pegged to the US Dollar. On top of that, the leading stablecoin issuer, along with its affiliate exchange Bitfinex, has faced numerous controversies linked to Bitcoin price manipulations and their $850 mln cover-up.   

That said, USDC has a major downside that stems from its regulatory compliance  — lack of fungibility. Since the likes of USDC and GUSD are dependent on tight banking relationships, they have a backdoor system that allows blacklisting any suspicious transactions. 

article image
About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

thecryptobuds