Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tether reserves backed by 2.9% cash

ft.com

Post reply on HN
Print view View original

101–110 of 183 posts

Re: Tether reserves backed by 2.9% cash

#101

Post by DebtDeflation »

dehrmann wrote: post #9

The pitch is clearly a lie, but I'm also not too worried about them counting commercial paper and t-bills as "cash."

>The pitch is clearly a lie, but I'm also not too worried about them counting commercial paper and t-bills as "cash."

The pitch being a lie is EXACTLY the problem. Tether is supposed to be nothing more than the gateway between crypto and the rest of the financial system. There is no reason for them to hold anything other than deposits at insured institutions. There is no reason for them to be making loans. There is no reason for them to be paying above market interest rates to holders,

Re: Tether reserves backed by 2.9% cash

#102

Post by ur-whale »

H8crilA wrote: post #100
makomk wrote: post #77

Earlier quoted context omitted.

At this kind of scale, I don't think there's such a thing as plain "cash" free of any counterparty risk - even just holding it in a bank account has risk attached (and most banks probably don't want an account with that much money in it because that would pose risks to them - they have the exact same problems finding somewhere to put it). US treasuries and AAA-rated bonds and commercial paper are about the best you c…

Short dated treasuries are practically indistinguishable from "cash". They're counted together on corporate balance sheets. Also, what do you mean "cash"? Printed bills? Deposits in commercial banks' checking accounts? Would savings accounts count too (they can be frozen for some amount of days)? Deposits in Fed accounts?

You're right. These days, the word "cash" is basically meaningless for anything bigger than buying a bagful of groceries at the store.

And it's not going to get any better.

What sad times we live in.

Re: Tether reserves backed by 2.9% cash

#103

Post by jiofih »

Marazan wrote: post #71

I run ScamStableCrypto. I create a billion ScamStableCoins and claim they are worth $1 each. I give a billion ScamStableCoins to ScamCryptoExchange. ScamCryptoExchange is run by me. ScamCryptoExchange writes an IOU for one billion US dollars and gives it ScamStableCrypto (my right hand gives something to my left hand). I, as ScamStableCrypto, write down in my balance book that I have a billion dollars of Commercial P…

Sounds like fantasy. Whatever they wrote you the IOU for also comes out of your book, so your balance is $0. Doesn’t work like that.

Re: Tether reserves backed by 2.9% cash

#104

Post by ur-whale »

mike_d wrote: post #68
ur-whale wrote: post #55

Earlier quoted context omitted.

One very interesting sentence in that document is the "100'000 USDC token blacklisted" If you ever thought govt-backed cryptos and centralized tokens like USDC were a good idea, ask yourself this: Could a stack of greenbacks ever be "blacklisted" (I mean, people have certainly tried with various "tricks")? One of the nice property of money as we've known it so far was fungibility. With govt-backed (e-dollar) and/or c…

> Could a stack of greenbacks ever be "blacklisted" Yes. Bill counters at banks capture serial numbers and associate them with your account when you make a cash deposit. Each night the serials are sent to a MCP database where they are checked against a hotlist entered by law enforcement across the country. The bank won't reject the bills on the spot, but depositing too many of the wrong ones will earn you a visit.

True, but you can still spend them at the grocery store.

Tracing cash bills is a complicated affair beyond a couple of transactional hops.

Re: Tether reserves backed by 2.9% cash

#105

Post by nlitened »

atq2119 wrote: post #43
jbverschoor wrote: post #37

Does it really matter when banks have a reserve requirement of 0% since 2 years?

Sibling comments express justified disbelief at this question, but just in case: in our modern monetary system, reserve requirements aren't the "last resort" against bank runs. The central bank will jump in and provide the required liquidity to prevent a bank run as a last resort, and (since it is the entity which ultimately runs the monetary system) the central bank is by definition always able to do so. For a bank…

I believe, in your analogy Tether _is_ the central bank. They don’t need a fall back, they print the money.

Re: Tether reserves backed by 2.9% cash

#106

Post by Clewza313 »

jiofih wrote: post #103
Marazan wrote: post #71

I run ScamStableCrypto. I create a billion ScamStableCoins and claim they are worth $1 each. I give a billion ScamStableCoins to ScamCryptoExchange. ScamCryptoExchange is run by me. ScamCryptoExchange writes an IOU for one billion US dollars and gives it ScamStableCrypto (my right hand gives something to my left hand). I, as ScamStableCrypto, write down in my balance book that I have a billion dollars of Commercial P…

Sounds like fantasy. Whatever they wrote you the IOU for also comes out of your book, so your balance is $0. Doesn’t work like that.

Tether released a statement of assets. They said nothing at all about liabilities.
Post reply on HN