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I think what OP meant was why would anyone hold Tether at this point instead of a more transparent and less fudded stabelcoin like USDC
by puranjay 4y ago
I think what OP meant was why would anyone hold Tether at this point instead of a more transparent and less fudded stabelcoin like USDC
- jimmydorry 4y agoThe temptation is too great. If the stablecoin has a non-zero administrative cost, someone has to pay it. And if no-one wants to pay it, then it is going to have to invest a portion of the dollars it holds to make up the difference (and to ultimately reward the creators / seed investors). There are probably no 100% cash-backed stablecoins.
- JohnJamesRambo 4y agoThis is the breakdown for USDC. Luckily for crypto, USDC keeps climbing the charts and USDT will be a memory soon. Bad money is always exchanged out for good. >Jeremy Allaire @jerallaire 3/ As of 12:00pm EST Friday, May 13, 2022, the USDC reserve consisted of $11.6 billion cash (22.9%), $39.0 billion U.S. Treasuries (77.1%), for a total of $50.6 billion (100%), and there were 50.6 billion USDC in circulation
- kgwgk 4y ago> $39.0 billion U.S. Treasuries Par value or market value? If it’s the former the current value is surely less.
- ac29 4y agoWhy? Treasury bills are the appropriate choice here and are always bought at a discount to par.
- kgwgk 4y agoIf you bought $1000 worth of 1-year treasury bills (maturing in 12m) six months ago you have less than $1000 worth of treasury bills (maturing in 6m) today. That could be a problem if you need to recover today at least the $1000 that you put. (There may be no problem with much shorter maturities - or could be worse with bonds with longer maturity. The quote didn’t give any details.)