Deutsche Bank research analysts have published a report suggesting that most stablecoins, including Tether, face a high risk of failure due to a lack of transparency and vulnerability to speculative sentiment.
According to the research, over 334 currency pegs since 1800, only 14% of currency pegs have survived, with a median lifespan of 8-10 years for those that failed or were discontinued.
The report specifically expressed concern about Tether for its “monopoly in the stablecoin market that has been filled with speculation and lack of transparency.” Analysts also pointed to Tether’s alleged history of misleading claims on reserve holdings, which had led to $41 million fines by the Commodity Futures Trading Commission (CFTC). Additionally, concerns were raised about Tether’s role in the crypto derivatives market, which could amplify losses from leveraged trades.
In response, Tether criticised the report and argued that it lacked clear evidence and relied on vague assertions rather than rigorous analysis. The firm challenged the comparison to the collapsed TerraUSD, for which it was irrelevant to discussions about reserve-backed stablecoins.
The stablecoin issuer further questioned the credibility of Deutsche Bank, pointing to its own history of fines and penalties. Tether has issued attestations indicating holdings of over $110 billion in fiat reserves, though critics argue that these are not equivalent to formal financial audits.
Still, some industry figures like Cantor Fitzgerald’s CEO remain confident in Tether’s reserve holdings.