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Isn't parking Billions of dollars in reserve a waste of capital?

• dan-robertson 4y ago
  Firstly it isn’t so easy to just ‘park’ billions of dollars. Even if they’re in a bank they can be lent out by the bank. Secondly the point is sort-of that an organisation like tether doesn’t get the choice: their purpose is to hold dollars and issue equal amounts of their IOU, just like when a bank holds shares in Volkswagen and issues an equal amount of the ADR (the ADR represents the shares held by the bank but, unlike Volkswagen stock, can trade in US markets) because their job is to hold these two meant-to-be-equivalent things rather than to hold Tesla stock instead because they think that would be less of a waste of capital. If people felt that it was a waste of capital to put money into tethers then maybe they wouldn’t do it (but of course if you have tethers you can lend them in crypto things rather than regular things and maybe you think that’s actually better so you don’t care what tether the company does)