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>The price of a USDT is 1 dollar. They give out new USDT for $1 a piece. If this were the case, Tether would be back by cash. But it isn't: they claim it's bac
by NovemberWhiskey 6y ago
>The price of a USDT is 1 dollar. They give out new USDT for $1 a piece.
If this were the case, Tether would be back by cash. But it isn't: they claim it's backed by cash, cash-equivalents and receivables from loans, including loans to affiliated entities (or some similar language).
So, for example: they could create 1M USDT and immediately loan it to their associated crypto-hedge-fund (for zero interest). The hedge-fund promises to repay that loan in USD (creating 'reserves' for USDT), and immediately places buy orders for Bitcoin; generating demand for Bitcoin that will raise the price.