4 ms·

There's no way it's fully backed. I doubt that if Tether liquidated all their assets, they could cover even 90% of outstanding Tether. But they can spin all kin

• mistrial9 4y ago
  the whole of the US stock exchanges and many of the supporting assets, are already like that.
  • quickthrowman 4y ago
    Stocks aren’t pegged to the dollar, you’re comparing apples and wrenches. Tether is much more like a money market fund than an equity or bond. If your point is that there isn’t infinite liquidity at the current market price for an equity or bond, you’re correct, but it’s irrelevant since tether is nothing like an equity or bond.
    • mistrial9 4y ago
      yes, the distinctions you make are relevant; my point is exactly that there is NOWHERE NEAR the liquidity in ordinary markets.. I was too quick to object and with insufficient distinction, I stand corrected
    • potatolicious 4y ago
      +1 on all of the above, and to add: there isn't infinite liquidity on securities, and that's ok. And that's exactly the problem: Tether is pretending not be be an security, even though it transparently is. Heck, to generalize on this, this is kind of the ur-problem with crypto generally: a bunch of things pretending to be currencies but are actually securities. The whole subterfuge is intentional, to foist risky assets on people by lying about their nature, and to avoid the (hard fought and hard justified) regulations around said risky assets.
      • YawningAngel 4y ago
        Can you explain why USDT is a security but the US Dollar is not? It seems like the only real difference is that one has a wealthier and more powerful issuer than the other (which, obviously, is enormously significant still)
        • nightski 4y ago
          USDT's value is pegged to $1. USD is not pegged to anything else really.
          • kmeisthax 4y ago
            It is almost a rule of banking that pegs are made to be broken. If you say that one of something is worth one of the other, you are promising that you have a bottomless supply of the currency on both sides of the peg. This almost never actually happens and whoever is running the peg will inevitably be caught with their pants down. Bankers specifically love breaking pegs and have the means to do so. If USDT was run by the Federal Reserve nobody would question the system; because then they'd have the capability to issue both the USDT token and the dollars backing it. They would be considered as fungible as dollars in the bank versus dollars in your hand.
            • deleted 4y ago
              [deleted]
            • chii 4y ago
              > If USDT was run by the Federal Reserve nobody would question the system that's true, but only because the US (and the Feds) have had a good history of managing the system well (enough at least). And if that's the case, USDT is basically USD. It's the same reason why the USD is a reserve currency in the world today. Tether is attempting to tap into that reserve currency trust (ostensibly, to generate profit for themselves).
        • selectodude 4y ago
          the US Dollar is a currency. USDT is a security backed by things that aren't US Dollars.
  • hahaxdxd123 4y ago
    Ok but US money markets are not backed by Evergrande debt