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Coinbase doesn't use Tether to store customer funds, they are straight USD or the BTC/ETH itself. I'm not sure how a "bank run", or heavy withdrawal of USD, wou
by dahdum 6y ago
Coinbase doesn't use Tether to store customer funds, they are straight USD or the BTC/ETH itself. I'm not sure how a "bank run", or heavy withdrawal of USD, would cause any more problems than processing delays.
- arcticbull 6y agoThat's a bit of a lack of imagination. What happens is any USDT-BTC exchanges utterly collapse. The price there shoots up to hundreds of thousands of USDT per BTC, those BTC all flood to legitimate exchanges like Coinbase, and deplete their USD. If you believe as I do there's way more USDT printed than backed USD anywhere in the system, Coinbase will dry up too. The price will drop to pennies per BTC on Coinbase. Then there's a ton of bag holders with BTC, and literally no USD to exchange them for. Plenty of USDT though. This is what the 2% per month risk premium is about.