There is an archipelago consisting of numerous islands, each with its own currency. The value of these currencies fluctuates based on supply and demand, except for two currencies that have a fixed value and are accepted on all islands. The success of these two currencies is due to the presence of a stock of gold for each of them. However, there is a problem with transparency and credibility regarding the amount of gold in stock. While the first currency provides clear information about its gold stock, the second currency is less reliable due to manipulation of the gold stock needed to cover the distribution of the currency. As a result, islanders are turning to the first currency and abandoning the second one.
The first currency in the above example is USDC, while the second currency is USDT.
USDC is the safest stablecoin among all
USDC is a highly secure stable coin that is linked to the US dollar at a 1:1 ratio. Every unit of this cryptocurrency in circulation is backed by a corresponding amount of one dollar held in reserve. The reserve amount consists of a combination of cash and US Treasury short-term bonds. This makes USDC one of the most reliable and stable digital currencies available.
Why is USDC considered the safest of all stablecoins?
USDC is considered the safest stablecoin due to its transparent practices. Monthly attestation reports are published openly, providing a clear overview of the reserve backing it.
In addition to the above, USDC undergoes annual audits of its financial statements, adhering to the certification standards set by the American Institute of Certified Public Accountants (AICPA).
What’s the issue with USDT?
Tether, the company that issues the USDT cryptocurrency token, has acknowledged that the currency is not fully backed by the US dollar, and the company has never conducted a professional audit to verify its reserves. The reserves currently consist of cryptocurrencies that have fluctating prices, and Tether has also made loans to other parties using these reserves.
Additionally, many investors who own USDT are concerned about the lack of transparency and accountability in Tether’s internal operations. The company has not made significant efforts to make these workings public, leading to accusations that USDT is being used to manipulate Bitcoin’s price and launder money from criminal activities.
If Tether fails or is shut down, USDT tokens become worthless without a way to recover associated dollars.
The reason for linking AMAL with USDC
While chances of USDT falling are still low, numerous analysts have started discussing this possibility. Decentralized exchanges have also begun relying on USDC instead of USDT. Given the importance of ensuring security for all those involved with AMAL, we have made the decision to base the liquidity pool on USDC.
