1. reserve requirements have been 0% in many first world countries for decades. 2. I agree tether runs their operation in a bit of an opaque way. However, tha

1. reserve requirements have been 0% in many first world countries for decades. 2. I agree tether runs their operation in a bit of an opaque way. However, that should be the criticism indeed, not the composition of their portfolio, which is much the same as any other bank, really. To steelman Tether's position, it seems that their opaqueness is an intentional strategy to make them more resilient. They could easily get a bank charter somewhere, however you lose control, and must share it with the regulator. Regulators will review and approve directors/offices of the bank, you may in fact lose control over your own business. It also comes with all sorts of jurisdictional and political risk. Having been in that industry, I can sympathize with Tether, it's extremely hostile to large fintechs. They could be targeted simply for political reasons, or because someone connected decides to destroy by leveraging their regulator buddies power. How do you prevent that, without being opaque and telling those that may target you, exactly where all your assets are so they can just freeze them directly? I really wonder if they ever disclosed to NY AG whose commercial paper they hold.