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Banks have very specific regulations to comply with that are much much much stricter than anything Tether or USDC face. The better comparison for stablecoins a
by graeme 5y ago
Banks have very specific regulations to comply with that are much much much stricter than anything Tether or USDC face.
The better comparison for stablecoins are money market funds. The lockup of those caused the worst of the 2008 financial crisis. They also have much stricter regulations than stablecoins.
Fitch today released an opinion that stablecoin liquidations could cause a similar sort of systemic risk. They need some kind of regulation. No stablecoin has even done an audit! (Attestations are not the same)
- thebean11 5y agoUSDC certainly claims to be audited, by a big US accounting firm no less. Is there some nuance I’m missing?
- airstrike 5y agoYou may be equating "audited financials" with the mountain of regulations banks need to comply with that go way beyond their financial performance.
- dmitriid 5y agoThe nuance is "claims". It's never been properly audited.
- ac29 5y agoIf they've been audited, they've never released those audits.
- graeme 5y ago> Is there some nuance I’m missing? Yup. They’ve had attestations. In those, an auditor just looks at an account at a moment in time. So you could, for example: 1. Get a loan 2. Put it in the reserve account 3. Ask accountant to verify the amount 4. Accountant attests to seeing money in the reserve account 5. Afterwards, move money out to pay off the loans Sound crazy? Tether actually did this, it only came out in the NYAG settlement. USDC uses a US accountant, but nothing in the procedures they use would prevent such a scenario. The auditor merely relies on management assertions in an attestation.