4 ms·

Is this because everyone is buying it to get out USDC?

simple-thoughts 4y ago
Correct, also USDT management does not buy long dated treasury bonds or deposit in banks that do so. That on top of their deep relationships with every major centralized exchange means it’s very difficult to impossible for them to experience a run like USDC has.
- sottol 4y ago
  > Correct, also USDT management does not buy long dated treasury bonds or deposit in banks that do so. Wut? How would we know, they don't really share specifics. Last I know they have a lot of money in Chinese corporate bonds that will fare worse when growth slows a tad more but maybe that's outdated.
  - rippercushions 4y ago
    In November 2022, Tether claimed that they hold US$40B in US Treasury bills "with an average maturity of less than 45 days". https://assets.ctfassets.net/vyse88cgwfbl/1Xfu4398CIoMiuKjPhvnHM/6d1608c90bb775d2d432b7b24264da28/ESO.02_Std_ISAE_3000R_Opinion_30-9-2022_RC134792022BD0548.pdf https://assets.ctfassets.net/vyse88cgwfbl/1Xfu4398CIoMiuKjPh... (Whether you should believe this claim is, of course, another story entirely.)
    - beefield 4y ago
      My understanding is that US Treasury issues a bit more than 1000 billion USD worth T-bills each month. If this is true, Tether must be one of the largest T-bill purcahser (multiple percentages of total issuance every month). Count me sceptic. Somehow I would assume this would be big news in finacial world. Edit: how do they claim bying them? I thought they had no us banking access?
  - mister_tee 4y ago
    Tether claims they have completely exited their position in commercial paper and are currently over 70% in US T-Bills. https://tether.to/en/transparency/#reports https://tether.to/en/transparency/#reports Disclaimer that I'm a bit of a Tether skeptic, but if I'm wrong and they either were in, or have been able to get to, a fully-collateralized position of mostly treasuries and are earning 5% interest while paying 0% on USDT, good for them and good for regular people who won't be left holding bags. I'll always consider Tether in the context of their July 2021 CNBC interview with Deirdre Bosa. Timestamps are relative to the copy at https://www.youtube.com/watch?v=ZBEqyiO35cQ https://www.youtube.com/watch?v=ZBEqyiO35cQ I don't think they've said who the commercial paper counterparties were and claim it was an important trade secret. Traders in the US commercial paper market say they had never heard of the Tether folks which was odd given their attestations would have given them a top 10 global holding (17:20). Explanation, they use intermediaries. Will they give names or details on the intermediaries? Can't, trade secret. Did they hold Chinese commercial paper? Dodged the question twice (6:30 and re-ask 7:35). Where are the CEO and CFO of this company that holds $60B of assets? Why don't they talk to media? (24:40) But hopefully we'll get assurance regarding the reserves soon. They were excited to promise a formal audit in "months not years" during that interview (27:42)... looking forward to this spring so the audit can be released before we hit two years. (edit: trying to shorten)
    - grey-area 4y ago
      They’ve exited the position in ‘commercial paper’ that couldn’t possibly have been true? What proof verified by third parties is there that any of their assertions are true? There never has been one and there never will be. Tether are an obvious fraud run by fraudsters, caught several times committing fraud and already banned in many jurisdictions. They deserve zero trust and when this ecosystem collapses they will go to 0.
      - simple-thoughts 4y ago
        Yes USDT has management flaws but these are caused by limitations placed on their access to banking services - they have a long history of making sure they can maintain peg in spite of constant attacks from regulatory authorities, short sellers, and negative media publicity. No, I don’t recommend using USDT. But with the regulated coins being operated much more poorly than USDT, it may be the best option in certain situations.
- brutusurp 4y ago
  [flagged]
- shapefrog 4y ago
  > USDT management does not buy long dated treasury bonds or deposit in banks that do so. They don't buy long dated treasury bonds or deposit in banks because they don't have any reserves backing their "100% reserve backed" token.
collectedparts 4y ago
It's also a general expression of lack of confidence in the US banking system. Exchanges that offer true "USD" trading pairs ultimately have to store that cash [at a bank] somewhere. But at which bank? Before this week, most people probably wouldn't have paid attention. Some like Coinbase offer passthrough FDIC insurance [1], but again, if you have more than $250k you're potentially s-o-l just like an SVB depositor. So weirdly, 1 USDT ("definitely sketchy but somehow has never broken peg") all of a sudden may seem less risky than 1 "USD" at [which bank again?]. [1] https://www.coinbase.com/legal/insurance https://www.coinbase.com/legal/insurance
- threeseed 4y ago
  > But at which bank? One that has adequate risk management controls, attempts to comply with Basel 3 etc.
- deepsun 4y ago
  > somehow has never broken peg But all past stablecoins never broken the peg before they did.
- Eisenstein 4y ago
  Which bank does USDT hold their pegged dollars in, again?
- deleted 4y ago
  [deleted]
- Felminor 4y ago
  Alone the fact that every stable coin created itself out of thin air when bought, makes this tremendously stupid.
- KaiserPro 4y ago
  > It's also a general expression of lack of confidence in the US banking system. that's not it. there are far better gauges of dissatisfaction in US banking, share price in banks is a far better gauge. if you want a metric for USD then swiss franc is better. USDC and other "stable coins" are risky, noisy and generally bad medium to long term investments. Unlike domestic currency they have such small trading volumes that they are easy to manipulate. Thats great if you're the one doing the manipulation. At best they perform better than cash, but without any of the protection, at worst they go bust. Emerging markets have less fraud than generic crypto backed devices.

Correct, also USDT management does not buy long dated treasury bonds or deposit in banks that do so. That on top of their deep relationships with every major centralized exchange means it’s very difficult to impossible for them to experience a run like USDC has.

sottol 4y ago
> Correct, also USDT management does not buy long dated treasury bonds or deposit in banks that do so. Wut? How would we know, they don't really share specifics. Last I know they have a lot of money in Chinese corporate bonds that will fare worse when growth slows a tad more but maybe that's outdated.
- rippercushions 4y ago
  In November 2022, Tether claimed that they hold US$40B in US Treasury bills "with an average maturity of less than 45 days". https://assets.ctfassets.net/vyse88cgwfbl/1Xfu4398CIoMiuKjPhvnHM/6d1608c90bb775d2d432b7b24264da28/ESO.02_Std_ISAE_3000R_Opinion_30-9-2022_RC134792022BD0548.pdf https://assets.ctfassets.net/vyse88cgwfbl/1Xfu4398CIoMiuKjPh... (Whether you should believe this claim is, of course, another story entirely.)
  - beefield 4y ago
    My understanding is that US Treasury issues a bit more than 1000 billion USD worth T-bills each month. If this is true, Tether must be one of the largest T-bill purcahser (multiple percentages of total issuance every month). Count me sceptic. Somehow I would assume this would be big news in finacial world. Edit: how do they claim bying them? I thought they had no us banking access?
- mister_tee 4y ago
  Tether claims they have completely exited their position in commercial paper and are currently over 70% in US T-Bills. https://tether.to/en/transparency/#reports https://tether.to/en/transparency/#reports Disclaimer that I'm a bit of a Tether skeptic, but if I'm wrong and they either were in, or have been able to get to, a fully-collateralized position of mostly treasuries and are earning 5% interest while paying 0% on USDT, good for them and good for regular people who won't be left holding bags. I'll always consider Tether in the context of their July 2021 CNBC interview with Deirdre Bosa. Timestamps are relative to the copy at https://www.youtube.com/watch?v=ZBEqyiO35cQ https://www.youtube.com/watch?v=ZBEqyiO35cQ I don't think they've said who the commercial paper counterparties were and claim it was an important trade secret. Traders in the US commercial paper market say they had never heard of the Tether folks which was odd given their attestations would have given them a top 10 global holding (17:20). Explanation, they use intermediaries. Will they give names or details on the intermediaries? Can't, trade secret. Did they hold Chinese commercial paper? Dodged the question twice (6:30 and re-ask 7:35). Where are the CEO and CFO of this company that holds $60B of assets? Why don't they talk to media? (24:40) But hopefully we'll get assurance regarding the reserves soon. They were excited to promise a formal audit in "months not years" during that interview (27:42)... looking forward to this spring so the audit can be released before we hit two years. (edit: trying to shorten)
  - grey-area 4y ago
    They’ve exited the position in ‘commercial paper’ that couldn’t possibly have been true? What proof verified by third parties is there that any of their assertions are true? There never has been one and there never will be. Tether are an obvious fraud run by fraudsters, caught several times committing fraud and already banned in many jurisdictions. They deserve zero trust and when this ecosystem collapses they will go to 0.
    - simple-thoughts 4y ago
      Yes USDT has management flaws but these are caused by limitations placed on their access to banking services - they have a long history of making sure they can maintain peg in spite of constant attacks from regulatory authorities, short sellers, and negative media publicity. No, I don’t recommend using USDT. But with the regulated coins being operated much more poorly than USDT, it may be the best option in certain situations.
brutusurp 4y ago
[flagged]
shapefrog 4y ago
> USDT management does not buy long dated treasury bonds or deposit in banks that do so. They don't buy long dated treasury bonds or deposit in banks because they don't have any reserves backing their "100% reserve backed" token.

collectedparts 4y ago

It's also a general expression of lack of confidence in the US banking system. Exchanges that offer true "USD" trading pairs ultimately have to store that cash [at a bank] somewhere. But at which bank? Before this week, most people probably wouldn't have paid attention. Some like Coinbase offer passthrough FDIC insurance [1], but again, if you have more than $250k you're potentially s-o-l just like an SVB depositor. So weirdly, 1 USDT ("definitely sketchy but somehow has never broken peg") all of a sudden may seem less risky than 1 "USD" at [which bank again?]. [1] https://www.coinbase.com/legal/insurance https://www.coinbase.com/legal/insurance

threeseed 4y ago
> But at which bank? One that has adequate risk management controls, attempts to comply with Basel 3 etc.
deepsun 4y ago
> somehow has never broken peg But all past stablecoins never broken the peg before they did.
Eisenstein 4y ago
Which bank does USDT hold their pegged dollars in, again?
deleted 4y ago
[deleted]
Felminor 4y ago
Alone the fact that every stable coin created itself out of thin air when bought, makes this tremendously stupid.
KaiserPro 4y ago
> It's also a general expression of lack of confidence in the US banking system. that's not it. there are far better gauges of dissatisfaction in US banking, share price in banks is a far better gauge. if you want a metric for USD then swiss franc is better. USDC and other "stable coins" are risky, noisy and generally bad medium to long term investments. Unlike domestic currency they have such small trading volumes that they are easy to manipulate. Thats great if you're the one doing the manipulation. At best they perform better than cash, but without any of the protection, at worst they go bust. Emerging markets have less fraud than generic crypto backed devices.