Stablecoins are designed to always remain tied one-to-one to the U.S. Dollar, marketing them as relatively safe assets in an otherwise highly volatile cryptocurrency market. However, a number of prominent stablecoins have fallen like dominoes, either due to failures in their algorithmic mechanism or simply not having sufficient reserves to maintain their peg.
Two prominent coins, TerraUSD and Tether (USDT), sparked a meltdown in the cryptocurrency markets recently after both coins slipped away from their Dollar peg. The former saw its value collapse to zero over the course of a few days, while the latter dropped below parity.
Transparency is Lacking, Even in Crypto’s Safe Space
Stablecoins were once considered the safe-haven assets of crypto, but the paradigm around these assets is shifting. Issues around trust and transparency are also contributing to this. For example, Tether (USDT) has been widely criticized for lacking transparency over its holdings. The group was fined $41 million by the U.S. Commodity Futures Trading Commission in 2021 over misleading reports about its stated reserves.
For years, Tether assured investors and the broader cryptocurrency market that it had $1 in reserve to back every USDT token. That claim was wildly misleading, according to a statement from the Commodity Futures Trading Commission.
With mounting negative press around transparency in the crypto markets, it is difficult to find projects that are both truthful and value-adding.
The lack of transparency is one of the reasons for slowing down the mass adoption of digital currencies. However, there are still good projects that are building trustworthy and high utility developments, one being MultiBank Group.
Security and transparency are things that MultiBank Group takes seriously. With the inbound launch of its innovative cryptocurrency exchange – MultiBank io – the company aims to change the perception of the industry, taking action to make the market a safer place for investors, both new and experienced.
The platform is designed to protect investors’ funds and provide a secure, transparent trading platform for its users. The company is adamant when it comes to providing the highest levels of security. For example, separated client accounts and the use of tier 1 banks are just some examples of the Group’s commitment to client safety and security.