The Tether Controversy: Authenticity of Documents Used to Gain Banking Access
- The Benefits and Drawbacks of the Bank of Canada’s CBDC
- Considering CBDCs’ Capabilities
Tether reacted to the Wall Street Journal’s investigation on Saturday, which contended that Tether was using fictitious paperwork and dummy businesses to get banking credentials. On Mar 4th, Tether denied the claims, calling them “completely incorrect and deceptive.”
Tether further asserted that it had regulatory procedures to adhere to regulatory obligations about knowing your customer (KYC), anti-money laundering, and counter-terrorism funding regulations. Bitfinex, the crypto platform, and Tether company claim these adherence initiatives are operational.
In a blog entry headlined More Tether FUD from WSJ,” Tether underlines how closely it collaborates with Bitfinex and other international law administration organizations, as well as the US Department of Justice (DoJ), to combat terrorism, money laundering, and other illegal activities.
Notwithstanding the diversions caused by the most recent allegations, Tether claims it will keep providing the most dependable and liquid stablecoin service. In addition, Tether reported a fourth-quarter 2022 profit of $700 million and a minimum of $67 billion in additional reserves and total holdings.
Due to the significant adoption of its USDT in the cryptocurrency sector, Tether has been the subject of various disputes and allegations. Moreover, banks are essential for preserving market liquidity for stablecoins. Tether was also said to be connected to the troubled cryptocurrency exchange FTX, although this was not confirmed.
The Benefits and Drawbacks of the Bank of Canada’s CBDC
To supplement the country’s current legal currency, the central bank of Canada is proposing the introduction of an offline CBDC (central bank digital currency). The central bank disclosed that its most recent experiments are a component of a more extensive investigation into commercial CBDCs in a staff analysis statement published in February.
The bank thinks a CBDC that operates offline would let consumers send and receive digitized Canadian dollars without network connectivity. Before a full-scale launch, however, several elements must be taken into account, with the length of the offline duration proving the most crucial.
With beneficiaries demanding a percentage of the user’s certified cash, users can transfer money during brief periods without internet access. Settlement is recorded on the ledger once internet connectivity has been restored.
If offline periods are prolonged, a different ecosystem powered by specialized equipment will be required for settlements. In addition, adding funds and registering the devices can be challenging.
However, money must first receive approval from the offline system when making periodic offline transactions. According to Canada’s central bank, the broad usage of CBDCs services without a network will advance access to financial services in areas without a reliable internet link and provide substantial advantages over current products.
Operating CBDC offline is reliable compared to some electronic payment systems as they do not necessitate internet connectivity. Due to this, clients can indeed purchase items even during network failure periods when they cannot utilize standard forms of payment, including debit and credit cards.
Considering CBDCs’ Capabilities
CBDCs are electronic equivalents of the traditional fiat currency that central banks generate. They provide customizable cash, faster and less expensive transactions, better finances, higher accountability, inclusivity, and compatibility with other digital currencies.
Ultimately, CBDCs can completely change the banking markets by offering a versatile, safe, and effective replacement for current payment methods.
Central banks are adding various capabilities to CBDCs to make them more competitive with alternative payment systems. The capacity for cross-border transactions is a vital aspect that several countries in Southeast Asia are researching.
