Tether is a cause for concern for some economists

Tether, the world's third-largest cryptocurrency by value, is a cause for concern for some economists, including US Federal Reserve officials. They fear that it could be a risk to financial stability and that its problems could have serious consequences for the entire market, the CNBC news server warned. Tether is pegged to the US dollar, but is also secured by loans. Boston Fed President Eric Rosengren warned of a cryptocurrency tether last month. He described it as a possible risk to financial stability. Some investors then believe that the loss of confidence in the tether could become a cryptocurrency black swan, an unpredictable event that would have a serious impact on the market. Economists are also increasingly concerned that problems around the tether could affect markets outside the digital currency. Like bitcoin, tether is a cryptocurrency, but it is very different from bitcoin and most other currencies. It is the so-called stablecoin, ie a digital currency that is tied to real assets. These currencies, unlike most cryptocurrencies, maintain a stable value. Common cryptocurrencies are very unstable, for example, the value of bitcoin in April rose to a record almost 65,000 USD, but since then it has decreased by almost half. Tether is pegged to the US dollar. While the value of other cryptocurrencies often fluctuates, the price of tether usually corresponds to one dollar. However, this is not always the case and fluctuations in the value of tether in the past have frightened investors. Cryptocurrency traders often use tether to purchase additional cryptocurrencies as an alternative to the dollar. Cryptocurrencies are unregulated and many banks reject digital currency transactions due to the high level of risk involved. In such cases, stablecoins tend to occur.