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That's precisely how you would keep a peg: let the market enforce it and bear the brunt of the speculative action, then intervene brutally to restore the peg an
by manholio 4y ago
That's precisely how you would keep a peg: let the market enforce it and bear the brunt of the speculative action, then intervene brutally to restore the peg and reward those who held the line with profits. If you do it a few times, nobody will bet against the peg ever again.
Of course, this is all predicated on you actually having the massive assets required to fight a speculative market. That shouldn't be a problem for something like USDT which should be backed 1:1. So let's sit back and enjoy some price discovery (though I wouldn't be caught dead in USDT).
- mijoharas 4y ago> which should be backed I think the major issue is that there seems to be a lot of evidence that it isn't.
- gilrain 4y ago> That shouldn't be a problem for something like USDT which should be backed 1:1. What if we all know it’s backed 1:1 by junk bonds?
- pjc50 4y agoReminded of when the UK was unable to defend the stablepound against, er, Soros: https://www.investopedia.com/terms/b/black-wednesday.asp https://www.investopedia.com/terms/b/black-wednesday.asp