Tether, the leading stablecoin, is enhancing its monitoring of token usage to combat illicit finance, partnering with Chainalysis to develop tools targeting transactions linked to sanctioned entities. Despite controversies, Tether has reached a circulation of $100 billion, driven by its use as a dollar alternative in emerging markets.
3 May 2024 – Tether, the world’s largest stablecoin, has announced an intensified effort to monitor its tokens’ usage in the broader cryptocurrency market and payments sector, aiming to combat illicit financial activities. Partnering with blockchain analytics firm Chainalysis, Tether has introduced new tools designed to identify transactions linked to sanctioned entities and scrutinize the behavior of significant token holders.
Last month, reports surfaced linking Tether to various sanctions evasion schemes, including Venezuela’s PDVSA increasing its use of the stablecoin for oil and fuel exports, and Russian intermediaries using it to procure military equipment. While Tether did not directly address these reports, it emphasized the traceability of its transactions and its cooperation with law enforcement agencies.
Despite controversies, Tether has experienced substantial growth, reaching a circulation of $100 billion in March, largely fueled by its popularity as a dollar alternative in emerging markets. Stablecoins like Tether serve multiple functions, including payments and facilitating conversions into other cryptocurrencies like Bitcoin on exchanges. Tether, registered in Hong Kong and owned by a company based in the British Virgin Islands, has the ability to freeze its tokens in response to law enforcement requests. – ref: Reuters
