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Fractional reserve refers to the reserve of cash, but it does not refer to the reserve of total assets/liabilities. If you are implying Tether is backed by tot
by fiter 8y ago
Fractional reserve refers to the reserve of cash, but it does not refer to the reserve of total assets/liabilities.
If you are implying Tether is backed by total assets/liabilities, then some people might be OK. On the other hand, some people might be concerned if it was backed by cryptocurrencies which are rather volatile. The volatility of the cryptocurrencies could then result in volatility in Tether.
- theptip 8y agoTether claims to be 1:1 backed, i.e. each USDT issued is backed by a USD in their reserve. I don't believe that is actually true in Tether's case, but yes, I was referring to 1USD in reserve per 1USD-stable-token as the viable stable/pegged token case.