Did you say centralized? Tether has added new addresses to its blacklist, effectively freezing over $150 million in USDT. Why is this a problem for some
Tether freezes $150 million in USDT
Because of its highly centralized operation, stablecoin issuer Tether can freeze addresses containing USDT, when it feels it is necessary. This just happened yesterday with three addresses containing over $150 million in USDT.
This is a routine move for Tether, which has already added 312 addresses to its blacklist during 2021. Not all of them, however, contain such a large sum. In general, frozen addresses are addresses that have been used for criminal activity, or have been cited in ongoing court cases.
Tether’s centralization in question
As always, this of course raises the question of Tether’s centralization. The stablecoin issuer has chosen a strong concentration of power, which allows it to have control over all addresses containing USDT.
This type of centralisation is often seen as completely antithetical to the ideas advocated by cryptocurrency enthusiasts. Bitcoin’s original ambition was to create an uncensored payment system that operates outside of state control. Tether’s power over its networks is therefore considered a cardinal sin by some.
Does this help to threaten Tether’s hegemony? USDT’s capitalisation is not as far away from its competitors as it once was. Currently, Tether has a market cap of $78 billion, compared to $44 billion for USD Coin (USDC).
There has also been a breakthrough in the UST of TerraUSD, whose capitalisation has increased by 21% over the last 30 days. Its CEO, Do Kwon, also took the opportunity to remind us that it is impossible to freeze addresses containing UST:
Anon there is no blacklisting key for $UST https://t.co/70GP5q5Z8n
– Do Kwon (@stablekwon) January 14, 2022
Will Tether’s centralization end up playing tricks on it? Stablecoin remains dominant in the market, but alternatives are becoming more and more known, and may actually threaten its place
Tether freezes $150 million in USDT Tether Binance Bitcoin ETH SHIB dogecoin ElonMusk NFTs pic. twitter.com/jabJ72J5je
– Tether (@Tether_to1) January 17, 2022
