4 ms·

Why print money when a private company can just create its own? Just imagine what's going to happen when there's a bank run on Tether.

thaumasiotes 5y ago
Presumably, USDT would lose value. What then?
- StavrosK 5y ago
  The entire cryptocurrency market would collapse and cryptocurrency would become usable again.
  - deleted 5y ago
    [deleted]
  - Forbo 5y ago
    I anxiously await the next bear market crunch to flush out all the garbage that has gotten sucked in. It feels like 2017 all over again.
- viraptor 5y ago
  Coinbase will be very happy with the influx of USDC users.
joering2 5y ago
Its unbelievable that someone stoles a $20,000 car and do 15 behind bars, yet here we have folks that embazzled $850,000,000 and AG will sit down with them to kibdly negotiate a plea deal and penalize them 4% of what they stole. I mean seriously what the hell happened to Lady Justice??
- celticninja 5y ago
  its the age old thing, if you owe the bank $100k you have a problem, if you owe the bank $100million then the bank has the problem.
- WJW 5y ago
  It has always been this way, read about some of the things the ancient Romans or renaissance Brits/French got up to when you feel like it.
- iso1210 5y ago
  Always been that way. The richer you are the more likely you'll get off. The more abstract a crime the lighter the sentence. Throw them both together.
- pjc50 5y ago
  "Crime" is more about class than people are willing to admit.
- whywhywhywhy 5y ago
  Stealing a car is an act of aggression against an individual. Crimes are not simply about the monetary damages.
  - joering2 5y ago
    But wouldn't you argue that a guy who stole a car and was peacefully caught with no damage to car, people or property, caused less damage than what $850,000,000 stolen from gullible investors did? I mean - wouldn't that turn off victims from ever entering any stock market, be it NASDAQ or even their 401k found, causing more damage to the US financial ecosystem?
    - whywhywhywhy 5y ago
      Out of interest what violent crime would you consider comparable to "$850,000,000 stolen from gullible investors"? What should the prison sentence be for that in your eyes? and what would a violent crime that gets a similar sentence be?
nopassrecover 5y ago
It’s an interesting thought isn’t it. Many of us in the haze of an enlightenment narrative in the 90s thought the web would empower through a decentralised model, and while it’s done that of course, it has also created powerful new sources of centralised power, monopolies, and walled gardens, that have challenged (and often won against) existing legal, societal, and political structures and norms. It starts feeling a bit Neal Stephenson or Max Barry if you imagine a world in which monetary policy underpinning Western (and other) economies is further removed from existing political (especially democratic) levers. Weber’s argument that states draw their legitimacy from a monopoly on the legitimate use of force is largely supported in Western economies by a monopoly on the legitimate exchange of value as well. What does international trade, yet alone your annual tax return, look like in a world in which “govcoin” is just one (and a lower preferred one at that) of many currencies used day-to-day?
- viraptor 5y ago
  > What does international trade, yet alone your annual tax return, look like in a world in which “govcoin” is just one (and a lower preferred one at that) of many currencies used day-to-day? That's already a reality for many companies doing international trade. Especially global special-purpose device producers from smaller countries. It's annoying with paperwork and dealing with "what price was actually paid at the time", but it's not new. They contract a team from X, do work in Y, source materials from Z, V, W, then pay local accounting and tax in their govcoin equivalent - which happens to be the local currency. For day-to-day multiple local currencies check out the history of the Brazilian Real.
  - nopassrecover 5y ago
    Good examples. What do you think it means for the stability of nation states, either domestically or on an international scale, in such a world though? It’s the increasing practicality of doing this (buy your breakfast in StarbucksCoin, your lunch in McCoin, and your groceries in WalCoin) that makes it more possible as a reality. But how does a government have credibility and get taken seriously domestically if the currency they control is increasingly irrelevant day to day? How does the US continue to maintain leverage over energy costs? Etc.
initplus 5y ago
Can't have a bankrun if you don't allow withdrawls. Tether will not actually redeem your USDT for USD.
- Forbo 5y ago
  This just seems like Mt. Gox 2.0 waiting to happen.
Animats 5y ago
Just imagine what's going to happen when there's a bank run on Tether. Tether FAQ: "Unfortunately, Tether has decided to stop serving U.S. individual and corporate customers altogether. As of January 1, 2018, no issuance or redeeming services will be available to these users."[1] If there's a significant net outflow from Tether to USD, there's a good chance the whole thing comes apart. Remember, with Tether, there is no potential upside. If you're not using it for something within days, don't keep any money in it. [1] https://tether.to/faqs/ https://tether.to/faqs/
tumetab1 5y ago
The same of what happens in a regular bank run, cash conversions are delayed. That being said, the comparison is not totally fair. In the regular fiat banking system a bank run, the withdrawal of most deposits, destroys a bank because it fails to meet the reserves ratios mandated by the system. In the case of Tether there no such requirement and the reserves are liquid enough to meet the withdrawal requests in about a month - at least 2 workdays days for cash-like reserves liquidations, 2 workdays days to wire to cash to exchanges. Non-cash-like reserves might take longer but 2 weeks should be enough. Since Tether reserves aren't that being on each asset class and overall market probably won't trigger their own reservers depreciation. That being said the actual exchange rate on the exchanges will this happen will drop because people will panic sell and not wait for Tether company to meet their sell orders at 1USD.
lifty 5y ago
The whole modern banking system is run in the same way. Private banks create money as loans, but they are backstopped by the Fed and there's the FDIC insurance up to a certain amount. Tether might also create money but there's big additional risk because it doesn't have access to the Fed.

thaumasiotes 5y ago

Presumably, USDT would lose value. What then?

StavrosK 5y ago
The entire cryptocurrency market would collapse and cryptocurrency would become usable again.
- deleted 5y ago
  [deleted]
- Forbo 5y ago
  I anxiously await the next bear market crunch to flush out all the garbage that has gotten sucked in. It feels like 2017 all over again.
viraptor 5y ago
Coinbase will be very happy with the influx of USDC users.

joering2 5y ago

Its unbelievable that someone stoles a $20,000 car and do 15 behind bars, yet here we have folks that embazzled $850,000,000 and AG will sit down with them to kibdly negotiate a plea deal and penalize them 4% of what they stole. I mean seriously what the hell happened to Lady Justice??

celticninja 5y ago
its the age old thing, if you owe the bank $100k you have a problem, if you owe the bank $100million then the bank has the problem.
WJW 5y ago
It has always been this way, read about some of the things the ancient Romans or renaissance Brits/French got up to when you feel like it.
iso1210 5y ago
Always been that way. The richer you are the more likely you'll get off. The more abstract a crime the lighter the sentence. Throw them both together.
pjc50 5y ago
"Crime" is more about class than people are willing to admit.
whywhywhywhy 5y ago
Stealing a car is an act of aggression against an individual. Crimes are not simply about the monetary damages.
- joering2 5y ago
  But wouldn't you argue that a guy who stole a car and was peacefully caught with no damage to car, people or property, caused less damage than what $850,000,000 stolen from gullible investors did? I mean - wouldn't that turn off victims from ever entering any stock market, be it NASDAQ or even their 401k found, causing more damage to the US financial ecosystem?
  - whywhywhywhy 5y ago
    Out of interest what violent crime would you consider comparable to "$850,000,000 stolen from gullible investors"? What should the prison sentence be for that in your eyes? and what would a violent crime that gets a similar sentence be?

nopassrecover 5y ago

It’s an interesting thought isn’t it. Many of us in the haze of an enlightenment narrative in the 90s thought the web would empower through a decentralised model, and while it’s done that of course, it has also created powerful new sources of centralised power, monopolies, and walled gardens, that have challenged (and often won against) existing legal, societal, and political structures and norms. It starts feeling a bit Neal Stephenson or Max Barry if you imagine a world in which monetary policy underpinning Western (and other) economies is further removed from existing political (especially democratic) levers. Weber’s argument that states draw their legitimacy from a monopoly on the legitimate use of force is largely supported in Western economies by a monopoly on the legitimate exchange of value as well. What does international trade, yet alone your annual tax return, look like in a world in which “govcoin” is just one (and a lower preferred one at that) of many currencies used day-to-day?

viraptor 5y ago
> What does international trade, yet alone your annual tax return, look like in a world in which “govcoin” is just one (and a lower preferred one at that) of many currencies used day-to-day? That's already a reality for many companies doing international trade. Especially global special-purpose device producers from smaller countries. It's annoying with paperwork and dealing with "what price was actually paid at the time", but it's not new. They contract a team from X, do work in Y, source materials from Z, V, W, then pay local accounting and tax in their govcoin equivalent - which happens to be the local currency. For day-to-day multiple local currencies check out the history of the Brazilian Real.
- nopassrecover 5y ago
  Good examples. What do you think it means for the stability of nation states, either domestically or on an international scale, in such a world though? It’s the increasing practicality of doing this (buy your breakfast in StarbucksCoin, your lunch in McCoin, and your groceries in WalCoin) that makes it more possible as a reality. But how does a government have credibility and get taken seriously domestically if the currency they control is increasingly irrelevant day to day? How does the US continue to maintain leverage over energy costs? Etc.

initplus 5y ago

Can't have a bankrun if you don't allow withdrawls. Tether will not actually redeem your USDT for USD.

Forbo 5y ago
This just seems like Mt. Gox 2.0 waiting to happen.

Animats 5y ago

Just imagine what's going to happen when there's a bank run on Tether. Tether FAQ: "Unfortunately, Tether has decided to stop serving U.S. individual and corporate customers altogether. As of January 1, 2018, no issuance or redeeming services will be available to these users."[1] If there's a significant net outflow from Tether to USD, there's a good chance the whole thing comes apart. Remember, with Tether, there is no potential upside. If you're not using it for something within days, don't keep any money in it. [1] https://tether.to/faqs/ https://tether.to/faqs/

tumetab1 5y ago

The same of what happens in a regular bank run, cash conversions are delayed. That being said, the comparison is not totally fair. In the regular fiat banking system a bank run, the withdrawal of most deposits, destroys a bank because it fails to meet the reserves ratios mandated by the system. In the case of Tether there no such requirement and the reserves are liquid enough to meet the withdrawal requests in about a month - at least 2 workdays days for cash-like reserves liquidations, 2 workdays days to wire to cash to exchanges. Non-cash-like reserves might take longer but 2 weeks should be enough. Since Tether reserves aren't that being on each asset class and overall market probably won't trigger their own reservers depreciation. That being said the actual exchange rate on the exchanges will this happen will drop because people will panic sell and not wait for Tether company to meet their sell orders at 1USD.

lifty 5y ago

The whole modern banking system is run in the same way. Private banks create money as loans, but they are backstopped by the Fed and there's the FDIC insurance up to a certain amount. Tether might also create money but there's big additional risk because it doesn't have access to the Fed.