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I assume that the USDT holding of the big exchanges are on behalf of their customers. I those customer begin asking to convert their USDT to USD, that could be
by rowls66 4y ago
I assume that the USDT holding of the big exchanges are on behalf of their customers. I those customer begin asking to convert their USDT to USD, that could be a massive run.
- runesofdoom 4y agoI'm not a crypto participant, but my understanding is that technically Tether doesn't promise redemption in USD, just backing by USD. That still seems like it could precipitate a crash, but IDK if such a crash would be best described as a run or not.
- jandrese 4y agoWhat is the point of being backed by USD if you can't redeem it? "So you have this Monopoly money backed with a real dollar?" "Yes" "Can I see the dollar?" "No"
- mbrubeck 4y agoTether does offer redemption, but the minimum amount you can redeem is 100,000 USDT, and there is a fee that ranges from 0.1% to 1% depending on the size of the redemption: https://tether.to/en/fees https://tether.to/en/fees So if a well-capitalized arbitrageur can buy a million USDT at a price less than 0.999, they can redeem them for a profit, as long as Tether keeps honoring redemptions.