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They do not need to have 100% USD at Tether. Exchanges buy UDST from Tether, that means that there is an exchange. It would be problematic if they would give it
by tiku 5y ago
They do not need to have 100% USD at Tether. Exchanges buy UDST from Tether, that means that there is an exchange. It would be problematic if they would give it for free to the exchanges.
The exchanges won't give you free USDT either, they charge something in return.
The only way this could be a problem if they would use USDT from within Tether to buy crypto. I have not seen any evidence of this.
- raesene9 5y agoA question is, how would you see evidence of this? Wash trading with Tether has been alleged before but, as far as I'm aware, it's not possible to definitively prove or disprove that it occurred. So to me, that's not a strong signal either way, the operation of Tether and their dealings with exchanges are opaque, you need to take what they say on trust, as there are no external auditors.
- albntomat0 5y agoIt could also be an issue if a large number of people try to redeem a large amount of Tether for USD. Ideally, it would be easy and high trust to go from Tether to USD and back. This requires high confidence that the various backings of Tether are low risk, which we cannot establish given the minimal information Tether has provided.
- tiku 5y agoOnly thing is that you don't ever deal with Tether directly, the exchange needs to have that amount of USD for USDT. Same goes for BTC etc. Later the exchange needs to get USD from Tether if they need liquidity in FIAT?
- qeternity 5y ago> It could also be an issue if a large number of people try to redeem a large amount of Tether for USD. Not possible. Tether's terms of service explicitly state they have no obligation to redeem. Tethers only hold value so long as other people believe they do...which is the definition of a fiat currency.
- albntomat0 5y ago> Not possible. Tether's terms of service explicitly state they have no obligation to redeem. Which also leads to a scenario where no one wants to hold Tether > Tethers only hold value so long as other people believe they do...which is the definition of a fiat currency. True, but there's an incredible difference in kind between Tether and the Euro/USD/etc
- notwedtm 5y agoOr loaned large amounts of cash to an exchange to help them avoid insolvency.
- qeternity 5y ago> They do not need to have 100% USD at Tether. Exchanges buy UDST from Tether, that means that there is an exchange. How are these two things related at all? If an exchange buys Tether with USD, then they will have 1:1 USD backing.
- tehlike 5y agoCrypto. Exchanges can buy tether with crypto. Or... Tether can print and buy crypto, these two scenarios are exactly the same.