Patrick didn't talk about stablecoins, but Matt Levine did in Monday's newsletter[0]. Fundamentally, Tether and banks have the same problem: does everyone beli

Patrick didn't talk about stablecoins, but Matt Levine did in Monday's newsletter[0]. Fundamentally, Tether and banks have the same problem: does everyone believe that that bank still has enough money to pay you your deposits? If not, then bank run. Does everyone believe that Tether has enough money to back each coin with $1? If not, then run on Tether. Banks are regulated, so there's supposed to be a bunch of people keeping track of the bank's reserves to see if they have enough money to back deposits. Tether "solves" the problem by not telling anyone what their reserves are, so nobody can figure out if Tether truly has the money to back each coin at $1 or not. [0] https://archive.is/l4nLU https://archive.is/l4nLU