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> - They had 30% of their assets seized in a money laundering sting but of course, the exchange rate remained 1:1 instead of 1:0.7 Thsi one I don't understand:
by xtracto 6y ago
> - They had 30% of their assets seized in a money laundering sting but of course, the exchange rate remained 1:1 instead of 1:0.7
Thsi one I don't understand: A ton of MXN has been seized because El Chapo had been using it for shady stuff, but yet nobody expects the MXN/USD pair to suffer from that.
Why would it be different? The fact that someone takes the token "by force" won't suddenly decrease their value.
- arcticbull 6y agoIf El Chapo seized 30% of the MXN in existence I'd suggest the currency would in fact fluctuate lol.
- bostonpete 6y agoPrinting new money is generally understood to devalue existing money, why wouldn't the opposite be true? I don't understand your El Chapo point or know what sort of assets were confiscated. Even if it was all cash, I'm guessing it wasn't just incinerated.
- AlexCoventry 6y agoThey mean that 30% of the assets backing tether were seized, not that the tether itself was seized.
- TylerE 6y agoBecause Tether claims to hold $1 for every $USDT. But they obviously don't, they hold, at most, 70 cents. It'll be a bank run.
- wmf 6y agoAFAIK MXN never claimed to be backed by USD, but Tether claimed that USDT are backed 1:1 by USD in a bank account. We now know that there aren't $6B in that account but people still choose to trade USDT near par with USD; I guess this is analogous to how the value of the USD didn't fall when it became no longer gold-backed.
- arcticbull 6y ago...which is literally the flagship problem BTC purports to attempt to solve.
- AnthonyMouse 6y agoWhich is why USDT isn't Bitcoin. Its purpose is to solve a different problem.
- testrun 6y agoWhich is?