Financial institutions have to have enough safe liquid assets to offset their risk. This is reported and monitored regularly and required to operate. Some of yo

Financial institutions have to have enough safe liquid assets to offset their risk. This is reported and monitored regularly and required to operate. Some of your money deposited with them is also protected by governments, £85k per entity in the UK. Tether is not divulging their backing assets, referencing IP. No regulated authority would accept this, for good reason. Tether does not have adequate vanilla assets otherwise they’d just say so to diffuse the heat, especially right now. So even if they have magically worked out some secret sauce asset model, it inherently has more risk. There’s a run on Tether already, $7bn as of this morning’s press. This doesn’t mean it’s about to lose its peg like Terra did, they are very different models, but the risk of further run is very real and the assets they have to support that is shrinking. There’s a good chance Tether will ride this and it would have been a good test but it feels like a house of cards. Crypto needs to weed out the rubbish to get stronger.