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華爾街日報1 Risk Crypto Investors Should Watch With Tether
Key Points
Tether is the most traded stablecoin on the market, but investors should be mindful of transparency.
USD Coin may offer better transparency for those who value that more than liquidity.
Tether (CRYPTO: USDT) is often in sync with Bitcoin as the largest cryptocurrency by trading volume, offering versatility as a "safe haven" during periods of high liquidity in the crypto market. With each USDT token pegged to a dollar, it's often considered one of the safest cryptocurrencies on the market. However, investors should watch one key risk.
A large green sign of the word Tether.
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Tether's transparency is not as good as other stablecoins
Tether Limited, the issuer of USDT, has faced long-running scrutiny over transparency, since 2017. Investigations by the New York Attorney General's office found that in 2017 and 2018, the company did not maintain a full 1-for-1 backing of USDT. During that period, Tether Limited was instead using reserve funds meant for backing USDT to help cover a financial shortfall at its sister company, Bitfinex. Both companies were later banned from conducting business in New York.
While Tether Limited has recovered from the findings, transparency remains a concern. The company uses offshore banking partners, including banks in the Bahamas, to hold portions of USDT's reserves. Offshore jurisdictions may have looser disclosure requirements than U.S. regulations, limiting operational oversight.
USD Coin, by contrast, is considered a more transparent stablecoin. Its issuer, Circle, became a publicly traded company in June 2025 and is now subject to the disclosure requirements of the U.S. Securities and Exchange Commission (SEC). Circle is based in New York, known as one of the strictest states when it comes to crypto regulations. The company also reports USDC's full reserves monthly, compared to Tether Limited's quarterly report on USDT's reserves.
Be cautious with all stablecoins
Ultimately, it's a trade-off between transparency and liquidity. USD Coin is the more transparent stablecoin while Tether remains more liquid, having significantly higher trading volume and twice the market cap.
That said, no stablecoin is completely risk-free. Stablecoins can de-peg from the dollar (rarely) due to market conditions, liquidity issues, and regulatory changes. Therefore, traders may sometimes receive less value in fiat currency when selling stablecoins. Investors should remain mindful of these factors when considering any cryptocurrency investment.
Adé Hennis has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.