Paolo Ardoino, the Chief Technology Officer of Tether, recently addressed concerns via Twitter about the stablecoin Tether (USDT) trading below par on Binance.US. His comments were a response to speculation that Tether was de-pegging from the US dollar, a claim he firmly refuted.

Clarifying the matter to his followers on Twitter, Ardoino tweeted:

Ardoino highlighted the legal challenges that Binance.US was facing at the time. Although he did not delve into the specifics, he suggested that these challenges might have led to a shortage of market makers willing to arbitrage on the platform, causing Tether to trade below par on Binance.US.

He further clarified Tether’s role in market making. He emphasized that Tether was responsible for its primary market, while the role of market-making in secondary markets, such as crypto exchanges, fell to arbitrageurs and market-making professionals. This distinction underscored that Tether’s value on secondary markets was determined by these professionals, not by Tether itself.

To illustrate his point, Ardoino drew a comparison with Bitcoin (BTC), which also traded at different prices on different exchanges. He noted that the spread between BTC/USD and USDT/USD was roughly the same, suggesting that the perceived depegging of Tether was a misunderstanding.

Ardoino also mentioned a general spread of about 8% in the crypto markets. Spread refers to the difference between the highest bid price and the lowest ask price for a security. In this context, it seemed to refer to the price difference of cryptocurrencies across different exchanges.

Ardoino’s comments underscored the importance of understanding the dynamics of the crypto market before drawing conclusions about a particular cryptocurrency’s value or stability. He suggested that the concerns about Tether’s value on Binance.US were due to a misunderstanding of these dynamics.

Tether had been under scrutiny for its reserves and transparency practices. Despite these challenges, Tether remained one of the most widely used stablecoins in the cryptocurrency market. Its role in providing liquidity and stability in the volatile crypto market was undeniable.