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Stablecoin Tether has dipped below its 1:1 ratio with the US Dollar after a year of uncertainty regarding its fiat currency reserves.
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Tether, a cryptocurrency that has long been a point of contention in the community, has seemingly been uppegged from the US Dollar.
The stablecoin, by virtue of that very description, was linked to the US Dollar at a 1:1 ratio. Simply put, every Tether token that was minted had to be backed by a US Dollar.
Concerns around the validity of Tether’s reserves of fiat currency corresponding to the circulating amount of tokens seem to have taken its toll. On October 15, the cryptocurrency dipped below the $1 mark amid a wave of negative sentiment that has led to an apparent sell-off of Tether tokens.
Another factor that may have influenced the drop in value of Tether was a report at the beginning of the month which stated that both Tether and Bitfinex, the exchange responsible for issuing the tokens, had parted ways with Noble Bank in Puerto Rico.
This was followed by Bitfinex temporarily suspending fiat wire deposits - with no specific reason given for the decision. It could well be that the closure of its Puerto Rican bank account has exacerbated the situation.
Tether is still trading below $1 according to data from CoinMarketCap.
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