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The more interesting question is why has Tether been allowed to run wild for so long? Imagine if you were part of the current elite that had control over the c
by danieltillett 9y ago
The more interesting question is why has Tether been allowed to run wild for so long?
Imagine if you were part of the current elite that had control over the current fiat currency system and something like bitcoin appeared. You could ignore it and hope it and its kindred doesn't catch on with the population, or you could allow a fraudulent scam like Tether to run that pushes up the price into the stratosphere and then allow the bubble to burst tar-and-feathering the whole concept of crypto currencies. It is not like hundreds of trillions of dollars are at risk if we move away from fiat currencies.
- paulgb 9y agoWhat I don't get about these conspiracy theories about the "current elite", is if they thought bitcoin was such a threat they could just put money in it. Until I hear otherwise, I assume Hanlon's razor is at play here: regulators in all jurisdictions are still figuring out what to think about cryptocurrencies. US regulators have their hands tied in the case of Tether because they've gone to lengths to avoid US jurisdiction. Other regulators around the world may be less resourced.
- mr_spothawk 9y ago> they've gone to lengths to avoid US jurisdiction. can you offer some details about what you're describing?
- wmf 9y agoMost governments really doesn't like people issuing anonymous assets that are "as good as dollars" like Liberty Reserve or Tether. The entire point of Tether is to help cryptocurrency exchanges avoid AML/KYC laws (because it's expensive to comply with them) and their problems appear to stem from that. IIRC Tether is based in Taiwan and their mystical $2B bank account is presumably in some "offshore" jurisdiction. If Tether ever released an audit they'd have to reveal either that they have no money or what bank they're using and then that bank would be pressured to close their account.
- kalleboo 9y agoThey deny service to US customers.
- danieltillett 9y agoNo, because the value of controlling a fiat currency is that you can issue more. It is not any one crypto currency that is a threat, but the idea. To kill the idea you can't just ban something, you have to burn everyone so they hate it. Since when has something being outside of US regulators sphere of authority stopped the US government from acting?
- snowwrestler 9y agoI know this is sacrilege to cryptocurrency believers, but the primary value of controlling a fiat currency is the ability to stabilize your economy. It permits you to decouple the unit by which you measure economic value, from fluctuations in the total economic value in your economy. If you think of a currency unit as the unit of measurement for economic value, then when the economy shrinks you will need less of them, and when it grows you will need more of them. Fiat currency is desirable for the same reason a tape measure is more useful than a yardstick. This is directly observable in the economic history of the United States. If you chart constant-dollar annual GDP growth from 1930 to today, there is an obvious decrease in volatility.
- danieltillett 9y agoYes this is right, but it is more than that. For example, you can use control of the currency to control the split between labor and capital, or save institutions such as the large banks in a GFC situation (look at the difference in how the owners of the banks faired in 2008 verses 1933).