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> safeguarding the integrity of the nation’s economy Without question crypto, now +2 trillion in market cap, is a systemic risk to the US economy, notwithstand

> safeguarding the integrity of the nation’s economy Without question crypto, now +2 trillion in market cap, is a systemic risk to the US economy, notwithstanding serious policy mistakes the Congress, Treasury & the Fed have made since QE1. I'm hoping USSS and other entities cleans house. USDT fully diluted market cap is about equal to that of PNC Bank, America's 7th largest bank. If PNC Bank's reserves and market action (eg. questionable "minting") were anything like USDT's we would've seen investigation and likely indictments & convictions.

lupire 5y ago
> market cap is about equal to that of PNC Bank, America's 7th largest bank. PNC Market cap, or assets they hold? A currency is not the same as the bank that holds it. Also, how big is PNC compared to #1?
- UncleMeat 5y ago
  In the cryptocurrency world, there is minimal distinction between the token and the "bank." This is by design. USDT can go to zero in a flash in a way that dollars cannot.
  - lupire 5y ago
    In the PNC world, there is a significant distinction.
- andruby 5y ago
  For USDT, you could make the case that it is comparable to the assets banks hold from customers. The creators of USDT claim that every holder can exchange it back to 1USD each. Although legally this is very different from a bank, I would argue that economically, it’s similar.
  - lupire 5y ago
    You can't make that case for PNC, though.
  - jimmydorry 5y ago
    That hasn't been true for many years. USDT creators originally claimed that every Tether was backed with USD, but then switched away from that years ago (if my memory serves me correctly). They now mention that they are backed by reserves, assets, etc. USDT creators have for a long time said that they are not obliged to honor every redeption and will instead only selectively allow redemption. (The implicit understanding is that they will honor Tethers that exchanges require exchanged, but not from users directly). Banks by design hold a fraction of what their clients deposit with them. This is one of the key mechanisms by which the economy expands... so a comparison against some "ideal" USDT is apples to oranges, but ends up being closer than expected when you use the actual USDT operating model.
- the_lonely_road 5y ago
  A flea buzzing around the ankles of the big 4 giants. A bank’s assets include the amount in customers’ deposit accounts, as well as loans, mortgages and credit card accounts. Some of these banks have thousands of branches, while others are mostly, or exclusively, online. All of these banks are FDIC insured. 7. PNC Bank: $4.49B As of July 2021, PNC Bank acquired BBVA USA and is transitioning customers and accounts. Including BBVA branches, PNC Bank now has branches in over half the country. ATMs: About 18,000; the bank may reimburse up to two out-of-network ATM fees per statement period. Branches: 2,800+ in 27 states and Washington, D.C., with high concentrations in Pennsylvania and Texas. 1. Chase: $2.45 Trillion Chase, the largest bank for consumers and small businesses, is part of JPMorgan Chase & Co. It has one of the largest branch networks out of all the biggest banks, with locations in the most states. ATMs: 16,000; some or all out-of-network ATM fees waived for premium accounts. Branches: 4,700+ in 48 states and Washington, D.C., with high concentrations in California, the East Coast and Texas; no branches in Alaska or Hawaii.
  - dantillberg 5y ago
    > PNC Bank: $4.49B ... Chase: $2.45 Trillion Perhaps grandparent's comparison of USDT market cap to the total value of the Financial Services Group stock is peculiar, but let's use correct numbers in the discussion. The grandparent comment refers to USDT market cap, which is ~$80B USD. That's roughly equivalent to PNC Financial Services Group ("PNC" on NYSE) market cap of ~$85B. JPMorgan Chase ("JPM" on NYSE) market cap is ~$450B USD.
- pjc50 5y ago
  The 10k claims assets of $466bn : https://www.sec.gov/ix?doc=/Archives/edgar/data/713676/000071367621000025/pnc-20201231.htm#i6ad42f6dd46d4b53aa700d407f32a7e4_208 https://www.sec.gov/ix?doc=/Archives/edgar/data/713676/00007... Minus liabilities of $412bn gives you $54bn of free equity, which is a decent enough reserve ratio (capacity to absorb losses) for a bank.
pinephoneguy 5y ago
Crypto would be far less of a risk if the Dollar was managed competently.
xibalba 5y ago
How is crypto a systemic risk? From my recollection of the 2008/09 financial crisis, systemic risks were those in which entities were deeply intertwined with one another on a massive scale, such that there failure would potentially bring down the entire system of finance. We're talking: retail banking (payments, savings, lending), commercial banking (idk?), public debt markets (bigco and gov funding), but most especially short term commercial funding. Again, going on memory, failure of short term funding (repo (?)) markets would have caused real, non-finance companies to become insolvent or at the very least massively impair their working capital positions. This has the knock on effect of reducing demand throughout their supply chains and major cost cutting (job loss). Etc etc. In other words, massive recession or even deep depression. Crypto, on the other hand, seems to be mostly a casino, a big one, yes. But one that is not deeply intertwined with other parts of the financial system. Coinbase, for instance, is not systemically important. It doesn't (yet) have tendrils in so many important lines of business as did the megabanks of yesteryear.
- l-lousy 5y ago
  It may be that the original poster meant that it may upend and take over the current system if the Govt can’t regulate it in some way
- mlac 5y ago
  When that much money goes “poof”, it’s going to have real world consequences. And the people who are going to get burned are the last ones on the bus - the least technical, the ones who think it will make them rich, the ones who can’t afford it.
  - SilasX 5y ago
    Yes, but the parent's point (and my concern as well) is that "market crash" does not necessarily mean widespread fallout (e.g. Black Monday in '87); that only happens when the losers are tightly coupled to other critical parts of the economy, which isn't necessarily the case here: GS/JP Morgan won't have to default on loans to critical counterparties in a crypto crash, for example. Any time a big group loses wealth all at once, there's some consequence, but that's not the same as "systemic risk" where it causes catastrophe in areas not directly related.
mbesto 5y ago
> market cap People keep using this word and don't know what it means. Why it's used for crypto still boggles my mind. > USDT fully diluted market cap is about equal to that of PNC Bank, America's 7th largest bank. If PNC Bank's reserves and market action (eg. questionable "minting") were anything like USDT's we would've seen investigation and likely indictments & convictions. You're comparing apples and bananas. They might be related but they're not the same.
deleted 5y ago
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lupire 5y ago

> market cap is about equal to that of PNC Bank, America's 7th largest bank. PNC Market cap, or assets they hold? A currency is not the same as the bank that holds it. Also, how big is PNC compared to #1?

UncleMeat 5y ago
In the cryptocurrency world, there is minimal distinction between the token and the "bank." This is by design. USDT can go to zero in a flash in a way that dollars cannot.
- lupire 5y ago
  In the PNC world, there is a significant distinction.
andruby 5y ago
For USDT, you could make the case that it is comparable to the assets banks hold from customers. The creators of USDT claim that every holder can exchange it back to 1USD each. Although legally this is very different from a bank, I would argue that economically, it’s similar.
- lupire 5y ago
  You can't make that case for PNC, though.
- jimmydorry 5y ago
  That hasn't been true for many years. USDT creators originally claimed that every Tether was backed with USD, but then switched away from that years ago (if my memory serves me correctly). They now mention that they are backed by reserves, assets, etc. USDT creators have for a long time said that they are not obliged to honor every redeption and will instead only selectively allow redemption. (The implicit understanding is that they will honor Tethers that exchanges require exchanged, but not from users directly). Banks by design hold a fraction of what their clients deposit with them. This is one of the key mechanisms by which the economy expands... so a comparison against some "ideal" USDT is apples to oranges, but ends up being closer than expected when you use the actual USDT operating model.
the_lonely_road 5y ago
A flea buzzing around the ankles of the big 4 giants. A bank’s assets include the amount in customers’ deposit accounts, as well as loans, mortgages and credit card accounts. Some of these banks have thousands of branches, while others are mostly, or exclusively, online. All of these banks are FDIC insured. 7. PNC Bank: $4.49B As of July 2021, PNC Bank acquired BBVA USA and is transitioning customers and accounts. Including BBVA branches, PNC Bank now has branches in over half the country. ATMs: About 18,000; the bank may reimburse up to two out-of-network ATM fees per statement period. Branches: 2,800+ in 27 states and Washington, D.C., with high concentrations in Pennsylvania and Texas. 1. Chase: $2.45 Trillion Chase, the largest bank for consumers and small businesses, is part of JPMorgan Chase & Co. It has one of the largest branch networks out of all the biggest banks, with locations in the most states. ATMs: 16,000; some or all out-of-network ATM fees waived for premium accounts. Branches: 4,700+ in 48 states and Washington, D.C., with high concentrations in California, the East Coast and Texas; no branches in Alaska or Hawaii.
- dantillberg 5y ago
  > PNC Bank: $4.49B ... Chase: $2.45 Trillion Perhaps grandparent's comparison of USDT market cap to the total value of the Financial Services Group stock is peculiar, but let's use correct numbers in the discussion. The grandparent comment refers to USDT market cap, which is ~$80B USD. That's roughly equivalent to PNC Financial Services Group ("PNC" on NYSE) market cap of ~$85B. JPMorgan Chase ("JPM" on NYSE) market cap is ~$450B USD.
pjc50 5y ago
The 10k claims assets of $466bn : https://www.sec.gov/ix?doc=/Archives/edgar/data/713676/000071367621000025/pnc-20201231.htm#i6ad42f6dd46d4b53aa700d407f32a7e4_208 https://www.sec.gov/ix?doc=/Archives/edgar/data/713676/00007... Minus liabilities of $412bn gives you $54bn of free equity, which is a decent enough reserve ratio (capacity to absorb losses) for a bank.

pinephoneguy 5y ago

Crypto would be far less of a risk if the Dollar was managed competently.

xibalba 5y ago

How is crypto a systemic risk? From my recollection of the 2008/09 financial crisis, systemic risks were those in which entities were deeply intertwined with one another on a massive scale, such that there failure would potentially bring down the entire system of finance. We're talking: retail banking (payments, savings, lending), commercial banking (idk?), public debt markets (bigco and gov funding), but most especially short term commercial funding. Again, going on memory, failure of short term funding (repo (?)) markets would have caused real, non-finance companies to become insolvent or at the very least massively impair their working capital positions. This has the knock on effect of reducing demand throughout their supply chains and major cost cutting (job loss). Etc etc. In other words, massive recession or even deep depression. Crypto, on the other hand, seems to be mostly a casino, a big one, yes. But one that is not deeply intertwined with other parts of the financial system. Coinbase, for instance, is not systemically important. It doesn't (yet) have tendrils in so many important lines of business as did the megabanks of yesteryear.

l-lousy 5y ago
It may be that the original poster meant that it may upend and take over the current system if the Govt can’t regulate it in some way
mlac 5y ago
When that much money goes “poof”, it’s going to have real world consequences. And the people who are going to get burned are the last ones on the bus - the least technical, the ones who think it will make them rich, the ones who can’t afford it.
- SilasX 5y ago
  Yes, but the parent's point (and my concern as well) is that "market crash" does not necessarily mean widespread fallout (e.g. Black Monday in '87); that only happens when the losers are tightly coupled to other critical parts of the economy, which isn't necessarily the case here: GS/JP Morgan won't have to default on loans to critical counterparties in a crypto crash, for example. Any time a big group loses wealth all at once, there's some consequence, but that's not the same as "systemic risk" where it causes catastrophe in areas not directly related.

mbesto 5y ago

> market cap People keep using this word and don't know what it means. Why it's used for crypto still boggles my mind. > USDT fully diluted market cap is about equal to that of PNC Bank, America's 7th largest bank. If PNC Bank's reserves and market action (eg. questionable "minting") were anything like USDT's we would've seen investigation and likely indictments & convictions. You're comparing apples and bananas. They might be related but they're not the same.

deleted 5y ago

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