Now there is a new narrative. Some political sectors want to sell the idea that the cryptocurrency market is a kind of parallel currency market. Although there are no explanations beyond the simple idea of taking the value of a stable cryptocurrency that represents the value of the dollar, to say that it is the price of fiat dollars in Venezuela.
The most popular stablecoin in the world is Tether (USDT), which is the most liquid due to its large capitalization, but it is often criticized for having less regulation. Following it is USD Coin ($USDC ), which has just under half the capitalization of USDT, but is considered safer from the perspective of state regulations. In fact, in Europe, using USDT is prohibited due to MICA regulations, while USDC is the accepted one.
It is important to start from a fact that even U.S. regulations have already established: cryptocurrencies are not money essentially. None. Although in the crypto ecosystem, due to their programming, they serve a role similar to that of fiat money, by emulating some of its characteristics, within applications that function as 'wallets'.
USDT and its risks
That is $USDT , a computer program. They are not specifically dollars and, although it tries to maintain parity with the dollar daily, it remains a commodity. Let's see.
In this case, we will consider stablecoins that are backed by fiat. However, there are other models, such as those backed by other cryptocurrencies, like DAI which is now changing its name to SKY; algorithmic ones, like USDD on the Tron network or XAU, which is backed by monetary gold.
USDT is an electronic token minted on a blockchain network that supports smart contracts. To create each token, the issuing company must have a real dollar deposited in a bank account. In the case of USDT, according to the audits displayed on its website, each token is backed by fiat money in bank accounts. They also use U.S. Treasury bonds.
That is to say, when someone uses a USDT token, they are not essentially using a dollar. They are using a representation of it, but the fiat money that backs that token in the crypto ecosystem is in the bank accounts of the token issuer. This means that those who hold USDT are at the mercy of what happens to the real money that is in the banks' accounts that back USDT on the blockchain.
