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Some exchanges have no traditional banking ties at all, so you have to send them some for of crypto in order to use them. It's also easier and quicker to move
by nebulous1 6y ago
Some exchanges have no traditional banking ties at all, so you have to send them some for of crypto in order to use them. It's also easier and quicker to move tether from one exchange to another than it is to receive a USD transfer and resend it to another, and that's ignoring regulatory issues.
- shuntress 6y agoThis does nothing to explain the purpose of Tether. If Exchange A has no "traditional banking ties" but is where I want to trade so I need to buy crypto through Exchange B first in order to trade that crypto on Exchange A why would I buy Tether instead of BTC through Exchange B?
- briatx 6y agoMaybe you do buy BTC on Exchange B. Then you transfer to Exchange A and sell, and what do you get when you sell? Tether. The point of Tether initially is regulatory arbitrage for Tether based exchanges. It gives them a fiat substitute without having regulatory baggage that trading in actual money would require. Tether then turned into a lifeline for a Bitfinex bailout and now acts as a (almost assuredly illicit) liquidity provider to Tether based markets. The only reason Tether is worth a dollar at this point is because the Tether denominated Exchanges say it is worth a dollar. They are really what backstop Tether now and are fully complicit.
- ChainOfFools 6y agoseems like a constant long term rise in BTC valuation is what keeps them backstopped in turn, then. well that and conveniently reliable outages in the middle of every major BTC sell-off.