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You have some valid critiques about the post, but the big point that you didn't answer in this is the idea that tether is more or less "unbacked" and with signi
by Raidion 5y ago
You have some valid critiques about the post, but the big point that you didn't answer in this is the idea that tether is more or less "unbacked" and with significantly less regulation that doesn't have even the (often critiqued) limits set forward in Basel II/III. USD is backed by the full weight of the US government, Tether is backed by a bank account with unknown things in it.
The fact that the market isn't totally efficient doing USD/BTC transactions directly and the fact that Tether is clearly far more risky than USD kinda indicates something is up. Who knows, they could be playing it safe and be well capitalized, but if they're not, it becomes a very similar situation to when Soros made a mint "breaking" the Pound.
- kyruzic 5y agoYes I am aware tether is not backed by nearly as much liquid capital as it claims. Neither are any traditional banks. Any flaws with tether are present in the traditional banking system. Tether at least solves a few of its flaws however. I am by no means a fan of tether or any other stable coins, but they are just as legitimate as our current banking system.
- elisbce 5y agoGeez, just because the current banking system also has risks in their investments doesn't mean they are the same as Tether. The amount of risks we are talking about is completely different. The US banks are backed by insurances, which are backed by the US government and Fed. This Tether company is registered in a tax haven and this guy supposedly lives somewhere in Hongkong. Most of their reserve are in offshore shady private banks since major banks won't accept cryptocurrency related transactions. There is a whole history how this guy found some banker from his hometown to start off the Tether reserve things. This Tether guy also was involved in fraud before. They could literally just disappear tomorrow with all the money and you can't even find him. So before putting out such claims like all the banks are the same as Tether, do your research first and stop blanket generalization.
- kyruzic 5y agoLet me know when a cryptocurrency causes a global crisis because of their inability to safely manage funds, because banks have a history of doing exactly that.
- gammarator 5y agoStay tuned!
- ouid 5y agoYour deposit in an actual bank is both highly regulated in terms of what it is allowed to finance, and also insured up to $250,000 by the FDIC. The situation is extraordinarily different.
- tenuousemphasis 5y ago>USD is backed by the full weight of the US government What precisely does that mean?
- bitxbitxbitcoin 5y agoThe full weight and threat of action by the US military gives the USD its global position.