3 ms·

Being that the fed buys twice the entire tether market cap in bonds ($120B) every month, their "systemic risk" talk does seem a bit overblown. I fully recogniz

Being that the fed buys twice the entire tether market cap in bonds ($120B) every month, their "systemic risk" talk does seem a bit overblown. I fully recognize the tether collateral situation is shady and could blow up. It also could remain shady and not blow up for a very very long time. It'd be a big deal for crypto but I'm not convinced it would be for the wider world. I hate sounding like the maximalist who calls everything FUD, but it's really hard not to here

jacoblambda 5y ago
The bigger concern is trading volume. I made another comment in chain about this but the short of it is that while Tether only makes up a 20th of the entire market cap, it makes up almost all of the trading volume on exchanges nowadays. If Tether catastrophically fails it'll pull the entire market with it and that'll have serious consequences now that there is institutional involvement in the cryptocurrency market. The broader goal here whenever this is brought up is to push people away from Tether towards other less problematic stablecoins. This isn't FUD, it's a call to action for communities and exchanges to start minimising their exposure to the risks that the current Tether situation poses.
- np_tedious 5y ago
  I guess my point is: Not that they'd ever do this, but if the Fed were really concerned they could easily bail out tether without doing anything outside of the "norm". > This isn't FUD, it's a call to action for communities and exchanges to start minimising their exposure to the risks that the current Tether situation poses. This seems a fair description of your posts. It does not seem to describe the Fed governor's statement
LarryEt 5y ago
This Fed speak for we need to regulate Tether IMO. Of course they don't really believe Tether is a systemic risk.

3 ms·

Being that the fed buys twice the entire tether market cap in bonds ($120B) every month, their "systemic risk" talk does seem a bit overblown. I fully recogniz

by np_tedious 5y ago

jacoblambda 5y ago
The bigger concern is trading volume. I made another comment in chain about this but the short of it is that while Tether only makes up a 20th of the entire market cap, it makes up almost all of the trading volume on exchanges nowadays. If Tether catastrophically fails it'll pull the entire market with it and that'll have serious consequences now that there is institutional involvement in the cryptocurrency market. The broader goal here whenever this is brought up is to push people away from Tether towards other less problematic stablecoins. This isn't FUD, it's a call to action for communities and exchanges to start minimising their exposure to the risks that the current Tether situation poses.
- np_tedious 5y ago
  I guess my point is: Not that they'd ever do this, but if the Fed were really concerned they could easily bail out tether without doing anything outside of the "norm". > This isn't FUD, it's a call to action for communities and exchanges to start minimising their exposure to the risks that the current Tether situation poses. This seems a fair description of your posts. It does not seem to describe the Fed governor's statement
LarryEt 5y ago
This Fed speak for we need to regulate Tether IMO. Of course they don't really believe Tether is a systemic risk.