Ripple CEO Brad Garlinghouse has publicly characterized Tether (USDT) as a potential "Black Swan" event for the cryptocurrency industry, urging regulators and market participants to scrutinize stablecoin reserve transparency.
Garlinghouse's remarks, delivered at a recent industry conference, underscore growing institutional concern over Tether's $95 billion market capitalization and its outsized influence on crypto market liquidity. Industry analysts estimate that approximately 70% of all Bitcoin trading volume is denominated in USDT.
The core issue centers on reserve composition. While Tether has gradually increased its holdings of U.S. Treasury bills, critics point to a historical lack of independent, comprehensive audits. A sudden loss of confidence in USDT's 1:1 peg could trigger cascading liquidations across decentralized and centralized exchanges alike, potentially erasing hundreds of billions in market value within hours.
For institutional traders and portfolio managers, this risk factor necessitates robust contingency planning. Diversification across multiple stablecoin pairs — including USDC, DAI, and emerging algorithmic alternatives — is considered a prudent risk mitigation strategy.
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