Tether and its dollar-based stablecoin USDT is taking a beating this morning, courtesy of WSJ.com. In a report, the news site hammers Tether as “undermining America’s fight against arms dealers, sanctions busters, and scammers.”
Tether is the 3rd most popular crypto in the world, with a market cap of over $118 billion.
Claiming that Tether has “spread deep into the financial underworld,” the authors claim that USDT is used by nefarious characters and rogue nations to move value around the world avoiding the prying eyes of regulators and enforcement agencies. This is claimed to include Russian scofflaws, sanctioned Venezuelan firms, and terrorists like Hamas.
A former Venezuelan oil minister says, “this cryptocurrency’s use only has served to perpetuate gigantic levels of corruption.”
The report acknowledges that providing global access to stablecoin can be a lifeline for people seeking safety and stability in jurisdictions suffering from hyperinflation.
The article notes that Tether did not provide a statement for the claims.
While bad actors may abuse USDT, the US dollar has long been the favorite of criminals everywhere. Digital transactions can be traced, perhaps better than fiat currency, but this requires a high degree of tech proficiency—something enforcement agencies are getting better at. What is missing from the equation are new regulations in the US that create a compliant environment for stablecoins in general. Congress has attempted to pass laws in the past but has been shot down due to partisan bickering.
Tether, as outlined in the article, aims to become the new and improved payment rails—low cost and fast. But this is a double-edged sword: It can be a big benefit for consumers and businesses but also catnip for the crooks.
