The largest stablecoin issuers may be far less resilient than the industry tends to believe. We explain what the concerns are.
Union Investment Head of Tokenization Christoph Hock stated that even large reserves of US Treasury bills do not guarantee Tether and Circle protection from a sudden liquidity crisis. He spoke at the Digital Money Summit 2026 conference, CoinDesk reports.
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Non-Obvious Risks of Tether and Circle
According to Hock, the reserve structure of the largest issuers resembles a speculative fund more than a conservative cash instrument. He specifically highlighted Tether’s investments in gold and bitcoin, which expose token holders to additional market risk.
The expert recalled instances of USDC▼$0.9998 de-pegging:
- In March 2024, the stablecoin fell to $0.74
- In 2023, USDC also collapsed to $0.87
Such drawdowns, he said, are unacceptable for corporate treasuries and asset managers that use stablecoins as quasi-cash instruments.
Learn more: USDT vs EU Regulation — Why Tether Is Facing Legal and Compliance Challenges in Europe
Tether’s Investment Activity
Amid discussions of risks, Tether continued expanding its ecosystem presence. The company, together with Gnosis, led the seed funding round for Sorted Wallet, a lightweight non-custodial crypto wallet for mobile devices in emerging markets.
The total round size was $4.4M, of which $3.4M was equity financing. Vox Solutions provided an additional $1M as strategic support.
Sorted Wallet is just 10 MB in size and has been downloaded more than 500,000 times, particularly in Nigeria, Kenya, Tanzania, Bangladesh, and Madagascar.
Tether CEO Paolo Ardoino noted that the investment aligns with the company’s strategy to promote stablecoins in the real economy and financial inclusion.
Learn more: USDC Perspectives 2026 — Can USDC Become the World’s Leading Stablecoin?
