Tether third world cryptocurrency black swan virtual currencies, according to JP Morgan and several economists - Currently, tether is the third largest cryptocurrency in the world with a market capitalization, according to CoinMarketCap, of 52,727 million euros (62,328 million dollars at the current exchange rate). Only behind bitcoin (550,332 million euros-650,547 million dollars -) and ethereum (234,535 million euros-277,243 million dollars -).

The tether is a stable currency (stablecoin), that is, unlike others such as, for example, bitcoin, it is linked to a real-world asset, in this case, the dollar. Therefore, the value of tether is usually one dollar. However, it has suffered some fluctuation in the past that has led some economists (including those of JP Morgan) to doubt what its performance will be in the future and, mainly, about how it can affect the crypto ecosystem.

An article published in CNBC reflects the views of several experts on this issue. This is the case of Eric Rosengren, chairman of the United States Federal Reserve (Fed) in Boston. For him, the tether is a potential risk to financial stability. In fact, several analysts consider that a massive loss of confidence in tether could be the black swan of cryptocurrencies, that is, an unpredictable event that would affect the entire market.

Tether third world cryptocurrency black swan virtual currencies

In the CNBC they give some notes that can explain the reason for this distrust towards the third largest cryptocurrency in the world. First, the fact that, last May 2021, the firm holding the cryptocurrency acknowledged that they only have 2.9% of their properties in cash. The rest is on commercial paper (unsecured short-term debt). The figure would place tether, according to JP Morgan, as one of the 10 largest commercial paper holders in the world.

Tether third world cryptocurrency black swan virtual currencies: In addition, there are suspicions that tether (which has more than 62,000 tokens in circulation) could have been used to manipulate the price of bitcoin: a study by a professor in the Department of Finance at the University of Texas and one of his students, argues that this stablecoin served to shore up bitcoin's declines in 2017.

As if all this were not enough, in early 2021, both tether and Bitfinex (an affiliated cryptocurrency exchange), agreed to pay 15.6 million euros (18.5 million dollars) after being accused by the attorney general of New York of moving hundreds of millions of dollars to cover losses worth 719 million euros (850 million dollars). The company, although it agreed, never recognized the crime.

Tether third world cryptocurrency black swan virtual currencies

In line with economists who see the possibility that a loss of confidence in tether is the black swan of cryptocurrencies, JP Morgan says that would cause “a big blow to the liquidity of the crypto market.” And they go further, as they predict that an increase in tether withdrawals could infect the market in general, and not just the cryptocurrency market.

They are similarly of the opinion of Fitch Ratings, an international credit rating agency, in which they specify that, “although currencies backed by safe assets have fewer risks, a major market rollover could leave a global or systemic footprint.”

Tether third world cryptocurrency black swan virtual currencies

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22 million people lost their jobs to the pandemic in developed countries and measures such as ERTS saved another 21 million jobs, according to the OECD

During the hardest months of the pandemic, most countries have opted to apply temporary suspension of employment programs to avoid the rampant increase in unemployment in the face of economic paralysis. Thus, at the beginning of May, a month and a half after the first coronavirus outbreaks in Europe, more than 40 million workers in the 6 largest European economies were covered by this system.

Retention programs of employment identified in the Temporary layoff of Employment (ERTE) in Spain, the kurzarbeitergeld German, the NOW-3 of Netherlands, the chômage partiel French or furlough british, among others, that, despite their different approaches, received the support of institutions like the European Central Bank (ECB), which ensured that served to reduce to half the problems of liquidity of the companies, and in about 2 thirds the risk of layoffs.

However, these programs, which end in many countries this summer, failed to completely stop the increase in unemployment, which rose by 400,000 people in the European Union in April of last year alone, while in the US some 20.5 million jobs were destroyed in that same period, which was the worst historical data of its labor market.

In total, some 22 million jobs have been destroyed in advanced economies in 2020 compared to the previous year due to the pandemic, according to the Employment Outlook 2021 report just published by the Organization for Economic Cooperation and Development (OECD), in which it reveals that "despite the partial recovery, there are still 8 million more unemployed than before the crisis and more than 14 million people are not actively looking for a job".

In addition, the OECD study predicts that the employment rate of its 37 member countries will not return to its pre-pandemic levels until the end of 2022. "The ongoing strong economic recovery in OECD countries has not yet fully translated into enough new jobs for employment levels to return to pre-pandemic records in most OECD economies," he says.

In fact, the organization predicts that the labour markets of its member countries will not fully recover until the third quarter of 2023, despite noting that several countries in the Asia-Pacific region could recover much earlier. In addition, his study highlights the strong labor impact of the pandemic on the younger population, especially in the USA, Canada, Mexico or Spain, where the young population has suffered twice as much unemployment as the adult population in general.

However, the report also reveals that retention programs and temporary suspension of employment have served to prevent the destruction of 21 million jobs, though he warns that the rich countries face the risk of higher long-term unemployment due to the difficulty to find a new job find many low-skill workers who have lost their jobs during the pandemic.