Tether Has More Competition On Its Hands After OKLink Launches USDK Stable Coin
The USDK stable coin is tradeable on the world’s second biggest exchange OKEx and joins a growing list of US dollar-pegged coins alongside market leader Tether (USDT), Coinbase’s USDC, TrueUSD and the Gemini dollar.
USDK has been launched by global settlement company OKLink, in partnership with US-based custodian Prime Trust. USDK, is also available on Bitfenix, and at press time had a 24-hour trade volume of $14.5m.
The launch follows an announcement from Star Xu, founder of OK Group about their plans to launch a stable coin, and puts them in direct competition with Tether.
“Prime Trust and OK Group signed a strategic investment agreement this month. OK Group is our lead strategic investor and plans to launch a compliant stable coin #OKUSD, which will operate #OKChain in the future.”
Tether has faced sustained pressure this year over its operations and whether or not its claim all USDT are physically backed was true, but it remains the largest stable coin by volume, with a market cap of around $3.54bn, ten times more than second-placed stable coin USDC.
Earlier this year it faced scrutiny after eagle-eyed social media users noticed it had quietly updated its terms in a way that seemed to diminish its claim that every dollar of USDT was one-to-one backed by physical money.
The update, reported on Tether’s home page said:
“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.”
This change lit up social media with many questioning just how genuine Tether’s claims were.
#Tether lawyer has now admitted that the #USDT is only 74% backed by cash and equivalents, according to an affidavit filed on Tuesday. That means that the real value of USDT is 0.74 cents, and not one dollar. So much for a peg. #stablecoin
— Weiss Ratings (@WeissRatings) May 1, 2019
In OK Group and Prime Trust, USDK has some strong backers. It’s clear Tether will need to up its game if it’s to remain competitive.