A Fed official in the US described Tether as a threat to financial stability.

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A senior US Federal Reserve official has described Tether’s USDT stablecoin as a risk to the stability of the financial system. In a slide presentation Friday, Boston Federal Reserve Bank Chairman Eric Rosengren listed Tether among the “financial stability challenges” that the US central bank is watching. Rosengren has also included stablecoins, which he calls “new disruptors” of short-term credit markets, among the risks.

He detailed the issue in an interview with Yahoo Finance the same day.

“The reason I’m talking about tether and stablecoins is if you look at their portfolio, it’s basically similar to that of a primary money market fund, but maybe they’re riskier. I think we need to think more broadly about what could disrupt short-term credit markets over time, and stablecoins are certainly among those elements. Right now, I think we need to take seriously what the stablecoin market is as it grows and becomes a more important sector of our economy.”

Caitlin Long, a Wall Street veteran and a Bitcoin supporter, found these words of the Fed official remarkable:

“Interesting thing is [Fed valisi Lael] Brainard and then [başkan Jerome] Powell started talking about stablecoins. But now Rosengren is speaking ‘Tether’ by naming it. These conversations are getting louder. Rarely are they so forthright.”

Long added that Bitcoin users, who consider Tether-related concerns to be exaggerated, should not “hit the messenger”. “I championed Tether as a groundbreaking technology and also said that the reserve disclosure raises more questions than it answers,” he said, referring to the company’s collateral breakdown behind USDT released in May.