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What is tether cryptocurrency (USDT)? All you need to know

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The tether price displayed on the Kraken cryptocurrency exchange website.

Tiffany Hagler | Bloomberg via Getty Images

Tether is the third largest cryptocurrency in the world by market value. And some economists – including a Federal Reserve official – are concerned.

Last month, Boston Fed President Eric Rosengren raised the alarm about Tethers, calling it a potential risk to financial stability. Meanwhile, some investors believe that a loss of confidence in Tether could be the “black swan” of crypto, an unpredictable event that would severely affect the market.

The issues related to tether are having a significant impact on the nascent world of cryptocurrencies. And economists increasingly fear that it could also affect markets beyond digital currencies. Here’s what you need to know:

What is tether?

Chances are you’ve heard a thing or two about Bitcoin by now. But what about the string?

Like Bitcoin, Tether is a cryptocurrency. In fact, it is the third largest digital coin in the world by market value. But it is very different from Bitcoin and other virtual currencies.

Tether is a so-called stablecoin. These are digital currencies that are tied to real assets – for example the US dollar – in order to maintain a stable value, unlike most cryptocurrencies which are known to be volatile. Bitcoin, for example, rose to an all-time high of nearly $ 65,000 in April and has almost halved in value since then.

Tether was designed to be pegged to the dollar. While other cryptocurrencies often fluctuate in value, the price of Tether is usually the equivalent of $ 1. That’s not always the case, however, and fluctuations in the value of Tether have scared investors in the past.

Crypto traders often use tether to buy cryptocurrencies as an alternative to the greenback. This essentially gives them an opportunity to seek security in a more stable asset during times of high volatility in the crypto market.

However, crypto is unregulated and many banks avoid doing business with digital forex exchanges because of the risk involved. This is where stablecoins tend to come into play.

Why is it controversial?

Some investors and economists are concerned that Tether’s issuer does not have enough dollar reserves to justify its dollar peg.

In May, Tether reduced the reserves for its stablecoin. The company announced that only a fraction of its holdings – 2.9% to be precise – was cash, while the vast majority was in commercial paper, a form of unsecured, short-term debt.

That would put Tether in the top 10 largest commercial paper holders in the world, according to JPMorgan. Tether has been compared to traditional money market funds – but without any regulation.

With more than $ 60 billion worth of tokens in circulation, Tether has more deposits than many US banks.

There have long been concerns about using Tether to manipulate Bitcoin prices, with one study claiming the token was used to prop up Bitcoin during major price drops in its 2017 monster rally.

Earlier this year, the New York Attorney General reached an agreement with Tether and Bitfinex, an affiliated digital currency exchange.

The state’s top law enforcement officer had charged the companies with moving hundreds of millions of dollars to cover losses of $ 850 million.

Tether and Bitfinex agreed to pay $ 18.5 million in settlement and were banned from operating in New York state, but the companies did not admit any wrongdoing.

Market contagion

JPMorgan analysts previously warned that a sudden loss of confidence in Tether could result in a “severe liquidity shock to the broader cryptocurrency market.”

However, there are also concerns that a sudden surge in tether withdrawals could lead to potential market contagion affecting assets beyond crypto.

In June, Rosengren mentioned tether and other stablecoins as one of several potential risks to financial stability.

“These stablecoins are becoming increasingly popular,” he said during a presentation.

“A future crisis could easily be triggered as these become a more important sector of the financial market unless we start regulating them and making sure that what is being marketed to the public as stablecoin is actually much more stable,” added.

Last week, Fitch Ratings warned that a sudden mass redemption of tether tokens could destabilize short-term credit markets.

“Less risk comes from coins that are fully backed by safe, highly liquid assets, although authorities may still be concerned if the footprint is potentially global or systemic,” the US credit rating agency said.

“While stablecoins that use partial reserves or apply a riskier asset allocation can be exposed to greater risk of running.”

Tether is not the only stablecoin on the market, but it is by far the largest and most popular. Others are USD Coin and Binance USD.

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Cryptocurrency

How Ethereum Steadily Holds Their Second Place For Years

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In the past few years, Ethereum has been one of the most stable coins on the market. From December 2016 to December 2017, less than a year, the value of Ethereum rose from around $ 8 to over $ 1,000. However, this sudden surge is not because it is a new coin that no one knows about; Rather, its popularity is based on how easy it is to program smart contracts on its blockchain. The system was developed by Vitalik Buterin, who viewed Bitcoin as an inefficient and expensive solution for payments and wanted something better.

Ethereum has been the second most stable coin for years. It wasn’t until early 2017 that XRP (Ripple) briefly overtook Ethereum to take its place before coming back, but it hasn’t left second place since then. It is currently valued at around $ 4,200 per coin and has a market cap of over $ 400 billion.

The reason it was built in the first place

Vitalik Buterin, a Russian-born Canadian programmer, founded Ethereum to create a platform where smart contracts can be easily created and executed by anyone in the world. His idea was to use a programming language that programmers would be familiar with and make programming easier for them. He also wanted to add other features like Turing completeness (the ability to execute an infinite number of commands depending on the length of the contract) and ensure that programmers don’t have access to each other’s information.

The Ethereum network allows developers to create decentralized applications called “dapps”.

Dapps is a decentralized version of an application. With traditional applications, all information is stored on a central computer and can be accessed by users from their computers.

In decentralized applications, all information is decentralized and each user can make their own copy of the application, which is updated as new information comes in. This means that if a developer creates a decentralized version of Twitter, every time a tweet is posted, all users who have downloaded the application will be updated accordingly.

Dapps can be used for a variety of purposes such as gambling, social media platforms, or even financial services.

It is also possible to create a new type of token with an Erc-20 standard on Ethereum

ERC-20 is a set of rules that all Ethereum tokens must follow in order to be compatible with each other. This enables developers to create new tokens on the same blockchain without having to recreate many of the functionalities already present in Ether.

Ethereum also has its Solidity programming language. This makes Ethereum more flexible than other cryptocurrencies due to its Turing completeness (ability to execute an infinite number of commands depending on the length of the contract).

This standard has led to the creation of ICOs (Initial Coin Offerings) that help startups raise funds for their projects. ICOs are a way to fund new cryptocurrencies through crowdfunding by allowing anyone to buy tokens offered by the company. This allows users to use these tokens within certain platforms or services, creating demand when more people are using them and adding value when they are more difficult to acquire.

How Ethereum is used in some industries

The betting industry is one of the industries that can benefit the most from Ethereum’s blockchain. This is because betting involves a lot of different steps that must be carried out quickly and efficiently. All of these actions (checking that users have enough money, executing commands, upgrading game credits, etc.) require some sort of verification process that must be performed from an external computer.

With Ethereum, all the actions that a betting company has to carry out can be programmed into a smart contract that does not require any verification by external computers and also does not have to be limited to a sequence of commands. This means betting companies no longer have to pay anyone to monitor their betting platform, and it also enables better transparency and betting in a trusted environment.

More and more betting platforms are using Ethereum as a payment method. The value of the coin and its submerged market capitalization are good reasons for the betting platform to use this currency just like Bitcoin. Soon we will see unbreakable relationships from Ethereum betting sites.

The recipe behind the steady success of Ethereum

One of the reasons for the steady growth of the aether is its simplicity. Ethereum’s blockchain can be compared to a web browser. Each user has their own copy of the entire blockchain to access Dapps and use them at any time.

When a user updates the Ethereum blockchain, their copy is also updated and automatically synced with all copies of all other users. This means that any new information added to a Dapp is instantly updated on every single copy of the blockchain.

This created a network in which each user can create their own “server” or “node”. As more users can connect to the network, it also becomes more difficult to shut down or destroy.

Ethereum has become one of the few coins that has a resilient value on the market. Even if the price goes down, it still has a high market cap, which makes it one of the most valuable coins around.

Another reason that makes Ethereum so versatile is that anyone can create their own coin on the Ethereum blockchain. Instead of creating an alternative coin or a new protocol, it’s easier to build new dapps on Ethereum, which also increases the demand and price.

This has created one of the largest industries in the world that anyone can invest in without having to go to middlemen.

The future of Ethereum

Ethereum has been one of the most stable coins on the market for years. Ethereum was developed by Vitalik Buterin, who viewed Bitcoin as an inefficient and expensive solution for payments and wanted something better. The system enables developers to create decentralized applications called “dapps” that can be used for various purposes such as gambling or social media platforms. It is also possible to create a new type of token with an ERC-20 standard on Ethereum, which has become popular with other cryptocurrencies and ICOs. In 2016 there were over 1 million active addresses of users who participated in transactions on the blockchain, which shows how this technology will continue to grow in the future.

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Miami-Dade County Cryptocurrency Task Force and American CryptoFed DAO Thank Wyoming’s Cryptocurrency and Blockchain Leaders for Educational Discussions

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Released: Oct 26, 2021 at 6:00 p.m. HST|Updated: 2 hours ago

CHEYENNE, Wy., Oct 26, 2021 / PRNewswire / – The Miami-Dade County Board of County Commissioners’ adoption of Resolution R-455-21 provides for the creation of a Cryptocurrency Task Force to review the feasibility of Miami-Dade County Accepting cryptocurrency and other forms of digital money as acceptable methods of payment for the county’s taxes, fees, and services, and making recommendations for other cryptocurrency policy initiatives that would be beneficial to Miami-Dade County. In order to accomplish the mission, as required by the same Resolution R-455-21, to review and analyze the efforts of other local, state, or national governments regarding cryptocurrencies, Chairman of the Miami-Dade Cryptocurrency Task Force, Elijah John Bowdre, has accepted an invitation from Marian Orr, CEO of the American CryptoFed DAO and the first DAO established under the Wyoming DAO law, visits Cheyenne and Laramie, Wyoming between 20.-22. October for educational talks with Wyomings Lawmakers, regulators, and thought leaders for the state’s successful cryptocurrency and blockchain initiatives.

Miami-Dade County

“Words cannot express how grateful I am for the educational discussions we have had and insights from leaders, including:

  • State Senators Chris Rothfuss, & Tara Nethercott
  • State Representative Ocean Andrew
  • Deputy State Secretary Karen Wheeler
  • Landesbank officer, Albert Forkner, Wyoming Division of Banking
  • Brenda Henson, Director of Wyomings Department of Revenue & Terri Lucero, Administrator of the Excise Department
  • Steven Lupien, Director of University of Wyoming Center for blockchain and digital innovation
  • Ashley Harpstreith, Executive Director of the Wyoming Taxpayers Association
  • Matt Kaufmann, Partner at Hathaway and Kunz, LLP.

Together, these innovative minds gave me deep insights into the Wyomings Success in creating and applying cryptocurrency and blockchain laws and regulations that today affect states and nations far beyond their borders Wyomings geographical boundaries. As chairman of the Miami-Dade County’s Cryptocurrency Task Force, my meetings with these leaders have provided me with comprehensive and practical guidance to provide a framework for discussing policy recommendations for. to accomplish Miami-Dade County with my colleagues. I am now planning to invite a delegation from Wyomings Cryptocurrency and Blockchain Guide to meet my Task Force colleagues at our home Miami-Dade County, and investigate the possibility of collaboration between Wyoming and Miami dade. This will likely extend to all of them Florida“, called Elijah John Bowdre, Chairman of the Miami-Dade County’s Cryptocurrency Task Force.

“I am so happy that Chairman Bowdre was able to meet with our state’s lawmakers and regulators and see how and why” Wyoming Laws, regulations and creative spirits have led to this Wyoming to become the leading blockchain and cryptocurrency jurisdiction, not just in the United States of America, but also in the world. It was a great honor to meet and introduce Chairman Bowdre to him Wyomings Cryptocurrency and blockchain lawmakers, regulators and thought leaders and for a coordinated path between Wyoming and Miami dade for future prosperity. Chairman Bowdre and his task force have an unprecedented and challenging mission, the feasibility of. to investigate Miami-Dade County Accepting cryptocurrency and other forms of digital money as an acceptable method of payment for the county’s taxes, fees, and services. As a former mayor of Cheyenne, Wyoming, I fully understand that it is vital for local governments to create new sources of income and provide better services to their citizens without increasing the tax burden on the city’s residents or businesses. I am very grateful for that Wyomings Executives who made Chairman Bowdre’s visit so successful that further collaboration and collaboration between Wyoming, Miami-Dade County and Florida just starting. “said Marian Orr, CEO of the American CryptoFed DAO.

Learn more about the Miami-Dade County’s Cryptocurrency Task Force:
https://www.miamidade.gov/govaction/legistarfiles/Matters/Y2021/210817.pdf
https://www.miamidade.gov/govaction/legistarfiles/Matters/Y2021/211528.pdf

Learn more about the American CryptoFed DAO:
https://www.americancryptofed.org/

(PRNewsfoto / American CryptoFed DAO)(PRNewsfoto / American CryptoFed DAO)

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SOURCE American CryptoFed DAO

The above press release is courtesy of PRNewswire. The views, opinions, and statements contained in the press release are not endorsed by, nor do they necessarily reflect those of Gray Media Group, Inc.

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Cryptocurrency trading slump drags down Robinhood revenues

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Robinhood showed signs of its once booming crowd of retail investors cooling off on the online broker, reporting that user growth stabilized over the last quarter and cryptocurrency trading stalled.

Although analysts had predicted a slowdown in trading volume, the sharp decline in crypto trading was unexpectedly large, with transaction income from the volatile asset class falling 78 percent from $ 233 million in the second quarter to $ 51 million in the third quarter.

The decline in crypto trading dragged Robinhood’s total revenue per user down 42 percent and helped drop its stocks by as much as 10 percent in after-hours trading, according to FactSet data. Transaction revenue declined 41 percent, from $ 451 million in the second quarter to $ 267 million in the third quarter.

Vlad Tenev, CEO and co-founder of Robinhood, said the company used the quarter to develop new products like crypto wallets that could serve as the foundation for future growth. “We believe Robinhood will become the most trustworthy and intuitive platform for retail and crypto investors,” he said.

Robinhood went public in July with an offering touted as part of the meme stock revolution that democratized finance by bringing millions of new retail investors to the public markets and cryptocurrencies.

The group estimated that half of all broker accounts opened from 2016 to 2021 were on their platform, and half of their 22.4 million funded accounts opened since 2015 were first-time investors. The decline in Robinhood shares on Monday night brought them below their $ 38 IPO.

The monthly active users on the platform fell from 21.3 million to 18.9 million in the last quarter. The broker said the decline in crypto activity has also resulted in “significantly fewer” new accounts as well as a decrease in the total number of funded accounts on the platform.

Funded accounts fell from 22.5 million to 22.4 million and new customers opened just 660,000 accounts, up from 5 million in the second quarter. The broker also warned that headwinds are likely to continue into the fourth quarter.

Although the summer months are traditionally slower for broker retailers, Robinhood’s results fared worse than more traditional players like Charles Schwab, according to Devin Ryan, director of financial technology research at JPMorgan.

Brokerage firms like Schwab “are still seeing strong metrics for exposure like net new money growth, which continues to be very healthy,” said Ryan.

Robinhood added crypto wallets to the platform earlier this month, a move that puts it in direct competition with more established digital currencies like Coinbase.

Despite the slowdown, Robinhood has grown rapidly over the past year. Revenue from cryptocurrency transactions was still up more than 800 percent from the year-ago quarter.

“The company had wired the tone of the quarter pretty well with its second quarter results,” said Ryan. “The question is: Are we going to return to a more normal level of activity after what is probably an unsustainable first half of the year?”

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