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Most Tether users either aren't in North America and/or are directly holding on-chain. Add up all the US and Canadian centralized exchanges, and accounts for mu
by dcolkitt 4y ago
Most Tether users either aren't in North America and/or are directly holding on-chain. Add up all the US and Canadian centralized exchanges, and accounts for much less than 10% of Tether's outstanding float. Now I certainly don't know if Tether has enough reserves to redeem 100% of their supply, but I'm almost certain they can redeem 10%.
- acchow 4y agoHow are you certain of this? Most countries' largest banks can't sustain a 10% redemption of deposits. That would be a bank run.
- evdubs 4y agoBanks have short term liabilities (customer deposits and certificates of deposit) and long term assets (business loans, mortgage loans, etc.). A bank cannot call its business and mortgage loans from the borrower, so the maturity mismatch can create credit crunches for banks. Tether has short term liabilities (tokens) and short term assets (T-bills, money market funds, bank deposits, etc.). Because most of their assets are in short term "cash equivalent" assets with lots of liquidity, Tether can more easily deal with large redemptions as they did in April - July when their market cap went from $83B to $66B.
- acchow 4y ago> Tether has short term liabilities (tokens) and short term assets (T-bills, money market funds, bank deposits, etc.) they claim.... We don't actually know what assets they really decided to hold.
- evdubs 4y agoThey claim and BDO Italia attests that these are the assets they hold. USDC likewise posts attestation reports, so we "know" Tether's assets as well as we do USDC's.