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I assume they are invested in ultra low risk assets. Have those sort of things ever crashed? I can see where they are coming from, because even Apple doesn’t
by JohnJamesRambo 5y ago
I assume they are invested in ultra low risk assets. Have those sort of things ever crashed?
I can see where they are coming from, because even Apple doesn’t really keep literal cash laying around, I assume no one does.
https://www.quora.com/Where-do-large-companies-like-Microsoft-and-Apple-keep-their-cash https://www.quora.com/Where-do-large-companies-like-Microsof...
- dalbasal 5y agoWhy do you assume that? Apple's cash reserves and are not the same thing as a stablecoin reserves. One is cash that a company owns, like Apple, and their shareholders own it along with the rest of the company. The other is the cash reserve backing an etherealized USD bank account. It's an "other people's money" problem. That's kind of the interesting part, to me. USDT is, a "private money" in a more real sense.. or at least different. As long as coin prices float, no one owes anyone anything. A stablecoin implies a price guarantor, a currency peg operator. If things play out the fun way, stablecoins get sansacked by WSB's version of George Soros. Then, in the next iteration, CoinBanks are offering fixed interest accounts.
- huntertwo 5y agoI also assume they are ultra low risk, but I also assume they are higher risk than USD or US Treasury bonds. For example, USDT is backed significantly by "commercial paper". Commercial paper does have a default risk, see https://en.wikipedia.org/wiki/Commercial_paper#Defaults https://en.wikipedia.org/wiki/Commercial_paper#Defaults
- JohnJamesRambo 5y agoThat’s a great link thank you.
- nonameiguess 5y agoThe commercial paper market crashed in 2008.