Tether, the largest of the stablecoins used in cryptocurrency markets to facilitate trading, briefly dropped to the lowest level since December 2020 as the fallout from the collapse of the TerraUSD token continues reverberate across the digital-asset landscape.

The price slipped as low as 94.55 cents from its intended 1-to-1 peg to the dollar on Thursday morning in London before recovering to just above 98 cents, Bloomberg-compiled data show. Paolo Ardoino, Tether’s chief technology officer, said in a tweet that investors can continue to redeem the tokens at a one-to-one value to the dollar via its platform.

With a market value of about $84 billion, Tether is an essential cog to the array of crypto trades occurring across the market at any given time. Investors turn to stablecoins as a way of retaining value without leaving the digital asset ecosystem, acting as a safe haven from volatile coins or even simply as a means of digital…

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