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> With estimated leverage of 383-to-1, Tether would be unable to honour all its tokens after losses of just 0.26%—a safety cushion that regulators would never allow at a bank. So even if they are telling the truth, it is still on the edge.
As opposed to banks in the US, which legally have a 0% reserve requirement. [1] [1] https://www.federalreserve.gov/monetarypolicy/reservereq.htm
Earlier quoted context omitted.
The big difference is the FDIC.
Which, if it were to fail (which is exceptionally unlikely), is backed by the US Treasury and the Federal Reserve. EDIT: Walking back to first principals, why can't the USD fail? Because you can print whatever adults in the room decide need to be printed to hold the economy up. You cannot do this with a deflationary digital asset, nor one tied to smart contracts.
Sounds like a feature to me. Printing money is effectively a socialized loss for everyone who's holding the currency.
Intellectuals should stop advocating that people be treated like children. PayPal and other e-wallets are not required to have bank charters to issue dollar-backed digital currency, and neither should stablecoins. In the wake of the 2008 financial crisis, a well-capitalized player, Walmart, which was expanding its banking activity via its Sam's Club lending, was well positioned to replace the incumbent Wall Street fi…
> PayPal and other e-wallets are not required to have bank charters to issue dollar-backed digital currency, and neither should stablecoins. Paypal actually has a bunch of state licenses. [0] Twenty-three of those are with a banking commissioner or department. [0] https://www.paypal.com/us/webapps/mpp/licenses
Earlier quoted context omitted.
Which, if it were to fail (which is exceptionally unlikely), is backed by the US Treasury and the Federal Reserve. EDIT: Walking back to first principals, why can't the USD fail? Because you can print whatever adults in the room decide need to be printed to hold the economy up. You cannot do this with a deflationary digital asset, nor one tied to smart contracts.
AKA: You, the American taxpayer.
Why do neo-goldbugs always try and present this as some sort of gotcha? As an American taxpayer I'm happy to buy into the social contract that it implies.
Earlier quoted context omitted.
As opposed to banks in the US, which legally have a 0% reserve requirement. [1] [1] https://www.federalreserve.gov/monetarypolicy/reservereq.htm
They still have tier 1 and tier 2 equity requirements. This isn’t really analogous.
Sorry, wasn’t sure if you meant that as a difference.
Noobs typically need protecting from themselves.
Earlier quoted context omitted.
Which, if it were to fail (which is exceptionally unlikely), is backed by the US Treasury and the Federal Reserve. EDIT: Walking back to first principals, why can't the USD fail? Because you can print whatever adults in the room decide need to be printed to hold the economy up. You cannot do this with a deflationary digital asset, nor one tied to smart contracts.
>Because you can print whatever adults in the room decide need to be printed to hold the economy up. You cannot do this with a deflationary digital asset, nor one tied to smart contracts. Sounds like a feature to me. Printing money is effectively a socialized loss for everyone who's holding the currency.
> Sounds like a feature to me. Printing money is effectively a socialized loss for everyone who's holding the currency.
The economy functioning is of greater benefit to the whole than the value to currency hoarders (remember, it's a currency, it's meant for exchange not for value storage and it is optimized for that role) maintaining its value. If you want to preserve wealth, own property/assets you expect people to trade their time or capital for into the future. People don't buy stonks or bonds for the ticker in their account, they buy the appreciation of the underlying or its cashflow. Most people buy real estate to live in (utility), for the appreciation of the property, or for the rental income cash flow (caveat is folks like the Chinese buying up international property to store their wealth outside of the reach of the CCP).
The updated report is here (PDF): https://tether.to/wp-content/uploads/2021/08/tether_assuranc...
Cryptocurrency is pulling back the iron curtain and revealing the real Wizard of Oz when you consider unequal regulatory treatment and unequal enforcement efforts. Remember BOA robosigning fake mortgages and commiting widespread fraud? Remember HSBC getting slaps on the wrist for multibillion dollar drug laundering? Let's see how far this political doublethink and perverse incentive onion goes.
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> stop advocating that people be treated like children Stablecoins are money market funds. Those initially came about due to regulatory limits on deposit-account interest rates and risk thresholds. They nearly took out the real economy in 2008. Stablecoins are recreating that structure, guaranteeing a peg against a portfolio of risky assets inextricably tied to the mainline financial system. (This is a summary of the…
>>They nearly took out the real economy in 2008. No they didn't. The government nearly took out the real economy. In the decade before the financial crisis, regulatory pressure was used to force banks to issue more subprime mortgages. This article from 2000 warns of the consequences: https://www.city-journal.org/html/trillion-dollar-bank-shake... Government sponsored enteprises, which underwrite 50% of the entire US…