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Market-wide panic ensued after Tether – the largest stablecoin by market cap – began losing its peg to the U.S. dollar.

What Happened

According to data from Benzinga Pro, USDT fell to an all-time low of $0.948 across major exchanges like Coinbase Global Inc (COIN) on Thursday.

Tether CTO Paolo Ardoino stated on Twitter that the stablecoin is honouring all USDT redemptions at $1 and over $300 million had been redeemed in the last 24 hours.

Why It Matters

USDT has a market cap of over $79 billion and is the largest stablecoin in the crypto industry. Unlike algorithmic stablecoins like TerraUSD, USDT keeps its peg to the U.S. dollar through Tether’s reserves.

Although the centralized stablecoin has been the subject of controversy, its large market cap is indicative of exactly how much of the crypto economy is reliant on its continued stability.

“if tether dies, it’s all over friends,” wrote Dogecoin cofounder Billy Markus on Twitter.

Others were reluctant to buy into the narrative that USDT would suffer the same fate as UST.

Price Action

At press time, leading digital assets Bitcoin and Ethereum were trading at $27,966 and $1,890, down 8% and 18% respectively over the last day.