Tether, the issuer of the world’s largest stablecoin USDT, has addressed concerns after a portion of its funds became temporarily inaccessible with EQIBank following recent legal challenges f
Tether, the issuer of the world’s largest stablecoin USDT, has addressed concerns after a portion of its funds became temporarily inaccessible with EQIBank following recent legal challenges facing the offshore digital bank. The company stated that its total exposure to EQIBank amounts to only 0.034% of its total reserves, seeking to reassure investors about the stability of its asset backing.
Problems surfaced when EQIBank’s assets were seized by the U.S. government, placing the bank under increased scrutiny. The legal situation has led to questions about how stablecoin issuers such as Tether handle their reserve funds during banking disruptions.
EQIBank, known for providing offshore digital banking services, is currently contesting the confiscation of its assets. The bank is engaged in legal proceedings to recover the seized funds. While these actions proceed, some client deposits, including those from Tether, remain affected.
Tether, a leading company in stablecoin issuance, explained that its risk relating to EQIBank is very limited when compared to its overall asset holdings. However, the firm has not disclosed the precise dollar amount at stake.
Journalist Yueqi Yang reported that Tether confirmed the low level of exposure. Still, the limited transparency about the total amount sparked further discussion among market participants about reserve management strategies by major stablecoin firms.
Mini dictionary: EQIBank, founded in 2015, is an offshore digital bank serving clients internationally, offering digital asset banking, custody, and other financial services outside the traditional banking system.
Tether indicated that the present situation does not mean the firm has lost significant amounts of money, as typically, funds held in banks under legal or financial distress may eventually be reclaimed following lengthy court processes.
Institution Status Tether Exposure Tether Normal operations 0.034% of reserves at EQIBank EQIBank Legal actions, assets seized by U.S. government N/ATether says its exposure to EQIBank is “just 0.034% of our total reserves,” and affirmed that the small amount has no impact on the quality or liquidity of its reserves while the recovery process is ongoing.
While addressing banking reserve issues, Tether continues to broaden the reach of its flagship stablecoin. Paolo Ardoino, CEO of Tether, announced that the company is moving forward with plans to enable USDT transactions natively on the Bitcoin network.
This expansion involves technical integration to allow USDT to operate using Bitcoin network protocols, particularly through collaboration with Lightning Labs to utilize the Taproot Assets protocol. The goal is to make USDT easily transferable on Bitcoin, with faster and more scalable transactions enabled through the Lightning Network infrastructure.
Applying this technology could increase USDT’s usability for payments and facilitate dollar-denominated transfers for Bitcoin users. Ardoino publicly underscored the company’s commitment by sharing, “USDT on Bitcoin. It’s coming home.”
Mini dictionary: Taproot Assets is a protocol that allows digital asset issuance and transfers directly on the Bitcoin blockchain, leveraging Taproot upgrades for scalability and privacy. Lightning Labs is a technology company developing solutions for scaling Bitcoin-based payments through the Lightning Network.
The integration with Taproot Assets could soon allow users to conduct USDT transactions on Bitcoin with enhanced speed and efficiency, potentially expanding use cases for both stablecoins and the Bitcoin network.
Despite current legal and banking pressures, Tether’s active expansion into new networks signals its ongoing effort to diversify USDT’s applications within the evolving cryptocurrency landscape.
The post Tether says EQIBank exposure is just 0.034% of reserves, expands USDT on Bitcoin appeared first on COINTURK NEWS.
