Peter Brandt Foresees Tethers Impending Failure and the Decline of USD

Peter Brandt has raised serious doubts about the stability of Tether, the largest stablecoin in the world. This concern aligns with the criticism from various financial watchdogs and analysts regarding the management of USDT and Tether.

Brandt’s comments were a response to a post by Consumers’ Research, the oldest consumer protection organization in the nation. The nonprofit organization exposed several troubling aspects of Tether’s operations.

One of the revelations was the allegation that Tether has misled the public about the solid backing of its U.S. dollars. This claim, according to the report, has laid the foundation for skepticism and distrust.

In response, Brandt stated, “It’s an interesting perspective. I have been arguing for years that Tether is ultimately heading towards disaster. I agree with all of this. The USD will eventually meet its demise, but Tether will experience it years before.”

Another factor contributing to the mistrust is Tether’s refusal to undergo a thorough and independent financial audit. This omission speaks volumes and has been criticized by Consumers’ Research for its lack of transparency. The organization has also warned potential Tether users about the risks associated with the stablecoin.

The criticism doesn’t end there. Tether’s creditworthiness, or lack thereof, was brought to the forefront last December when S&P issued a risk assessment of leading stablecoins. Tether received a distressingly low score, close to the bottom of their scale. The report highlighted several red flags, including Tether’s reserve management and non-compliance with regulatory frameworks.

Additionally, disclosures from an investigation by the New York Attorney General revealed that Tether’s reserves had significant exposure to commercial paper and securities from Chinese entities, including major state-owned banks. Despite Tether’s assurance that they no longer hold China-related assets, the absence of an independent audit leaves these claims unverified, further contributing to the narrative of risk and uncertainty surrounding the stablecoin.

JPMorgan has also expressed similar concerns, noting an “increasing concentration in Tether” as a negative trend affecting the entire cryptocurrency industry. The report highlighted Tether’s vulnerability due to its lack of regulatory compliance and transparency.