The company behind the stablecoin with the highest market capitalization will add modifications suggested by the International Financial Action Task Force
The company Tether Holdings Limited, firm behind the stablecoin USDT, announced that it will implement important modifications to comply with the suggestions made by the Financial Action Task Force (GAFI).
And the most important change is related to transfers this stablecoin made from an Exchange to other countries for amounts greater than a thousand units.
In this regard, as detailed by the company, the purpose is to comply with the Travel Rule of the FATF using Notabene software.
In this way, when these types of transnational operations are carried out for these amounts, user information will be shared.
In addition, the company reported that the necessary measures will be implemented to “to protect” the information of those involved when making transactions between cryptocurrency platforms, without leaking anything along the way.
Also from Tether it was indicated that it will begin to test the solution, which is compatible with several protocols, also to combat money laundering and crime in cross-border transactions between platforms.
USDT is the third largest market capitalization
The Fed’s battle against USDT
The stable cryptocurrencies or “stablescoins” are still in the sights of many specialists, who request a series of measures to “domesticarlas“and avoid future crises caused by them.
This is revealed in a report prepared by Investigators of the Federal Reserve Bank (Fed) and the Yale university, where it was indicated that these types of assets should be regulated like banks and promote more central bank digital currencies (CBDC, for its acronym in English).
In the study, dubbed “Tame the Wild Stable Coins”Furthermore, it is requested that cryptocurrencies that are linked to a currency or asset such as the dollar or gold and are not regulated, should be eliminated to avoid instability in the global payment system.
Furthermore, the investigation suggested that insured banks should issue stablecoins backed by government bonds.
Tether will implement modifications to comply with the FATF Travel Rule
Last May, Lael Brainard of the Federal Reserve, expressed concern that the stablecoins could breach their promise to pay. This is a risk that could destabilize the financial system.
“Bringing regulators together will allow us to assess the potential benefits of stablecoins while mitigating the risks they could pose to users, markets or the Finance system“Treasury Secretary Janet Yellen said in a statement.
The study was published days after the signing Tether (the third largest cryptocurrency in the world by market capitalization) was in the center of the storm by the dollar backing that gives you the stable tokens you issue.
It is important to note that 1 USDT It will always have a value equal to or very close to US $ 1. But since March 2019 changed support to include loans to affiliated companies.
Is the third largest market capitalization and the favorite of expert users to make transactions in the crypto world, that’s why your level of acceptance is so high.
Concern for economists
But this stablecoin is an object of concern to some economists, among whom is one of the most important executives of the United States Federal Reserve.
It is that although its link with the greenback makes it more attractive for banks, which seek to avoid high levels of risk inherent in the crypto market, among specialists the suspicion that the issuing entity of the USDT lacks sufficient reserves in dollars to back up.
Notably, in May, Tether revealed that only the 2.9% of its reserves are kept in cash, Meanwhile he 50% is represented by commercial papers, a form of short-term unsecured debt.
In this way, the firm is in the ‘top’ 10 of holders of commercial papers in the world, according to JP Morgan, and several of its analysts have warned that a sudden loss of confidence in the stablecoin could have a “severe and broad impact on the liquidity of the crypto market.”
For this reason, Eric RosengrenPresident of the Federal Reserve Bank of Boston called it one of the potential threats to financial stability.
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Attention USDT users: Tether announced changes to send its stablecoin to another country