October 8, 2024
By Our Correspondent
Tether’s USDT stablecoin, recognized as the most widely utilized cryptocurrency globally, has experienced periods of trading at a discount relative to the dollar since late September, as reported by Dessislava Aubert, a senior research analyst at the blockchain data firm Kaiko.
This discount has emerged concurrently with a series of monetary easing measures implemented by China’s central bank, aimed at addressing a deteriorating economic outlook that has led to a surge in stock prices.
Stablecoins are cryptocurrencies typically pegged at a 1-to-1 ratio with assets like the dollar. They serve as a medium for transactions and provide a safe haven from the often unpredictable price fluctuations associated with cryptocurrencies such as Bitcoin.
Livio Weng, the chief executive officer of the Hong Kong-based crypto exchange Hashkey, noted, “If traders are hastily converting back to fiat currency, it can be inferred that they are engaging in panic buying of Chinese stocks.”
According to Aubert from Kaiko, the lack of USDT/Chinese yuan trading pairs on cryptocurrency exchanges due to regulatory restrictions has positioned the dollar as the primary metric for assessing market activity. The observed slight discount indicates a heightened demand for dollars and a corresponding sell-off of Tether.
While it is challenging to quantify the extent of USDT selling pressure originating from Chinese investors on exchanges, other platforms provide a more definitive perspective.
Binance’s peer-to-peer marketplace indicates that merchants dealing in Chinese yuan are offering over-the-counter price quotes for USDT in the range of 6.78 to 6.98 yuan, whereas the offshore yuan is trading at 7.07 per dollar in the conventional currency market.
