Tether USDT discount on exchanges hit 5-month high following revelation of collaboration with US authorities

Tether’s USDT stablecoin discount on centralized exchanges like Binance and Coinbase has widened to its highest point since July, according to data from Paris-based crypto data provider Kaiko. This follows the stablecoin issuer’s recent revelation of its extensive cooperation with the U.S. authorities.

Data from CryptoSlate corroborates this finding, with the USDT stablecoin currently trading for $0.99911 as of press time.

CoinMarketCap data further shows that the discount can be found on major centralized cryptocurrency platforms like Coinbase, Kraken, and Binance. Interestingly, the discount is not evident on Bitfinex, a cryptocurrency exchange owned by Tether’s parent company, Hong Kong-based iFinex Inc.

The cause of the discounts remains unknown as of press time. However, Tether has previously maintained that market-making issues usually cause price deviations on cryptocurrency exchanges.

Tether’s USDT unrivaled growth

The current discount in Tether’s valuation on the heels of the stablecoin’s rapid expansion for this year

With a market capitalization surpassing $90 billion and a 70% dominance among U.S. dollar-pegged stablecoins, Tether is one of the fastest-growing stablecoins, minting over $23 billion worth of new tokens this year alone. This figure equals the total market capitalization of its biggest rival, Circle’s USD Coin (USDC).

While some industry experts view this growth as indicative of Tether’s robust fundamentals, others express skepticism, considering it an unsustainable trajectory.

Tether’s collaboration with the authorities

Meanwhile, Tether’s recent revelations of its extensive collaboration with the U.S. authorities have drawn extensive criticism from the crypto community.

CryptoSlate reported that Tether froze 326 wallets containing $435 million of its stablecoin for the U.S. authorities, including the U.S. Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Secret Service.

According to the stablecoin issuer, the actions were done to assist law enforcement agencies in combatting the illicit use of stablecoins.

Following the news, Checkmate, the lead on-chain analyst for prominent crypto analytics platform Glassnode, described Tether as a Central Bank Digital Currency (CBDC).

Other crypto stakeholders, including Cardano founder Charles Hoskinson, were surprised at the actions of the stablecoin issuer.

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