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> What can be said about Tether: it's a trusted third party that's vulnerable to fractional reserve What? Isn't the entire friggin point of Tether that it's _n
by tomjakubowski 8y ago
> What can be said about Tether: it's a trusted third party that's vulnerable to fractional reserve
What? Isn't the entire friggin point of Tether that it's _not_ a fractional reserve system?
From their own FAQ (emphasis mine):
> All tethers are pegged at one-to-one with matching fiat currency (e.g., 1 USD₮ = 1 USD) and are backed 100% by actual assets in our reserve account.
https://tether.to/faqs/ https://tether.to/faqs/
- AndrewBissell 8y agoI think by "vulnerable to fractional reserve," he means that since there is no way to transparently verify or audit their USD reserves, they could run a fractional system while claiming to be fully backed, like Mt Gox did.
- tomjakubowski 8y agoAh. I guess that my reading was "vulnerable to [bank runs, due to] fractional reserve."
- deleted 8y ago[deleted]
- cjbprime 8y agoTheir FAQ also promises to have audits of their USD reserves, which as I understand it they've since reneged on.