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Tether Backed by 3.87% Cash
- creepto 5y agoThese are IOU's sir, as good as money.
- TheCoelacanth 5y agoDepends who the IOUs are from. Money is also basically just an IOU.
- senkora 5y agonit: 3.87% times 75.85% which is 2.94% cash The mini pie chart is a breakout of only one of the slices of the bigger pie chart
- scrollbar 5y agoTitle should be “Tether reveals it is capitalized like any bank”
- iwubu99 5y agoexactly haha
- sschueller 5y agoYes, and as soon as there is a bank run the bank stops giving people their money. Just like what will happen if everyone wants their tethers in USD at the same time.
- jellicle 5y ago"...but not regulated like any bank"
- shuckles 5y agoTether is in fact not a bank, though? It is a service that in theory ports USD to block chains for ease of transaction. The last thing I would want for such a service would be to treat my money like it was a deposit at a non-FDIC insured investment bank.
- otoburb 5y agoIt would be best for the HN community if submitters stick to the HN guidelines and not blatantly editorialize the article headline. I’m bearish on Tether too, but the 76% backing in cash and cash equivalents is a far different picture compared to only focusing on the 3-4% cash.
- tluyben2 5y agoYeah, this is far less bad than I thought it would be. I did indeed expect a few %s to be actually backed by something of value. So please change the title.
- grey-area 5y agoI'm afraid I don't trust their unspecified 'cash equivalents' which are mostly not cash or anything close. So I think the title is justified and not in any way a distortion of their position. Here is some more detail on the breakdown and this unspecified 'commercial paper': https://amycastor.com/2021/05/13/tethers-first-breakdown-of-reserves-consists-of-two-silly-pie-charts/ https://amycastor.com/2021/05/13/tethers-first-breakdown-of-... Personally if they don't break down what those assets are, I wouldn't trust it's not just 'cryptocurrency assets' rebranded as cash.
- creepto 5y agoThese are IOU's, as good as money.
- carlsborg 5y ago“Commercial paper, in fact, formed the majority of its cash and cash equivalents category, with a 65% share. Fiduciary deposits formed 24% of the category, reverse repo notes 3.60%, treasury bills about 3%, and actual cash only 3.87%.“ Can someone who knows money market funds comment on who the commercial paper counterparties could be?
- nknealk 5y agoMost money market funds are required to publish their holdings. For example, here's a Schwab money market fund's holdings: http://hosted.rightprospectus.com/SF/MMD/Fund.aspx?cu=808515605 http://hosted.rightprospectus.com/SF/MMD/Fund.aspx?cu=808515... You can see every counterparty for the fund clearly listed and the dollar amount/date of maturity. Surely an above board holdings vehicle like Tether would publish similar disclosures right?
- carlsborg 5y agoInteresting link thanks
- Proven 5y agoOne day anti-Tether simpletons will realize Tether is more liquid than 99% of retail banks used by regular Americans
- JudgePenitent 5y agoThe stablecoin realm has a long way to go. At least Tether set the bar low. Wasn't the marketing at the beginning that Tether was a 1:1 Tether:USD ratio? When did they officially announce they were changing to a tokenized asset fund? Also where is the proof by Tether that indeed, this tokenized asset is more stable than USD?
- atatatat 5y agoI suspect this is why heavy hitters have been using Doge as a hedge on dips instead.
- caffeine 5y agoFlagged for sensational and completely misleading headline
- tootahe45 5y agoThat seems unbelievably high
- mdo123 5y agoThat's nice that tether management gets to keep all that interest!
- advisedwang 5y agoGiven pas doubts about tether management, the more important number is what % of the tether issued is backed at all, now how it is backed. The transparency report [1] shows that they have 0.2% more assets that liabilities (in USD) which gives me more confidence than anything else. [1] https://wallet.tether.to/transparency https://wallet.tether.to/transparency