According to The Wall Street Journal, a fall in the value of reserve assets by 0.3% could lead the issuer of the stablecoin Tether (USDT) to “technical insolvency.”
The publication has concluded that such a “thin cushion of equity capital” threatens chaos in the market if Tether’s liabilities exceed its assets.
The newspapers’ journalists have warned that under such circumstances, trust could dwindle, leading to a wave of people wanting to convert stablecoins to fiat.
According to the Tether Limited website, the organization’s capital stock is estimated at $190.9 million with assets of $67.74 billion.
79.62% of USDT reserves are backed by cash, cash equivalents, other short-term deposits and commercial paper.
