Tether (USDT), the largest and most liquid stablecoin by a significant margin, is taking steps to cement its position as a leader in decentralized finance (DeFi). According to a recent blog post, Tether believes that stablecoins will form the core of numerous new economic tools that will be vital to most modern economies in the coming decades.
Tether’s early focus on risk management and jurisdictional diversification has enabled it to navigate market conditions more smoothly than many of its competitors. The company said it has been able to maintain its market cap for the entirety of 2023, and following the failure of Silicon Valley Bank (SVB), Tether gained roughly $6 billion in a matter of weeks.
Contrary to irresponsible reporting by Bloomberg, Tether says it wants to unequivocally reiterate that it has no exposure to Silvergate, Silicon Valley Bank and Signature Bank. Tether views risk management as coming before artificially quick growth, and it hopes that its competition will improve its risk management and reliability.
USDT, Tether’s stablecoin, is integrated into 13 widely used blockchains, making it accessible to developers across a variety of environments. As many DeFi protocols are now deployed across multiple blockchains simultaneously, USDT provides a way for developers to ensure assets from one chain can more seamlessly swap to a different chain. Tether believes that if these trends continue, USDT will become the primary stablecoin used in DeFi.
Tether’s early history was filled with experimentation and challenges as it navigated what it means to function in a nascent decentralized financial system. Tether faced many challenges but ultimately overcame them to become the stablecoin of choice for crypto traders, developers, investors, and users in emerging markets.
Navigating these early challenges taught Tether the value of redundant, jurisdictional distribution, and these principles are part of why USDT is well-positioned to be the primary asset for DeFi.
