As you should know, USDT is a stablecoin pegged to the US Dollar, created and funded by the team at Tether. The way stablecoins work is that they are backed by FIAT currencies, in order to ensure they are tethered to a set price. In other words, for USDT to be pegged to the US Dollar, it needs to have a like for like backing in dollars, for each 1 USDT, there needs to be $1.00 in the pockets of its creators.

Many believe that as a result of the sheer volume of USDT in circulation, Tether do not have the funds to truly peg to USDT and that therefore, Tether could not afford to continue to run the token. According to Ethereum World News:

“The continual uncertainty as to whether USDT was backed by cold cash caused the fake news in mid October that Binance was delisting the stablecoin from the platform. The rumors were fueled by the fact that the bank Tether was using at the time, was facing insolvency issues.”

As a direct result of this uncertainty and FUD, USDT has remained a very controversial subject through the end of 2018, people are questioning the integrity of Tether and the general consensus worries that trust could be an issue in all of this. In order to scrape back some of its reputation, in november 2018 Tether announced that they did indeed have the funds to back all USDT tokens, with a claim that they had $1,831,322,828 in the bank.

Did anyone believe them?

This claim didn’t come with any substantial evidence, Tether assumed that the community would simply just take their word for it, many however did not. Now though, thanks to further research by Bloomberg, it does seem that Tether’s claims check out and that they do indeed have the funds to continue to back their production and release of USDT.

According to Ethereum World News, the research team on the project at Bloomberg have stated:

“Statements spanning four separate months detail the cash held in Tether Ltd.’s accounts, according to documents reviewed by Bloomberg. At least some of the statements have been shared with regulators, people with knowledge of the matter said. The question is whether there really is $1 in the bank for every Tether, and while the documents don’t provide a complete accounting of Tether’s finances, they do offer more detail than has ever been made public.”

Admittedly, there's a little more research to be done here, however, all things considered it seems that Tether are still in a great position and that the story is really only just beginning for USDT.