231–240 of 282 posts
Haha, after a decade of FUD, turns out USDT were more cautious and diligent with their funds, than the "regulated and transparent" USDC. Still risky, of course. No substitute to holding proper BTC.
So USDC is currently trading at $0.93. Which, if you believe in Coinbase, is free money. And if you don't, then its very bad news for the company and possibly worse news for the banks that are keeping the USDC reserves, because they are about to have a massive bank run on monday. https://coinmarketcap.com/currencies/usd-coin/
Earlier quoted context omitted.
What could the Federal Reserve learn? The structure of risk is similar for both Tether and Circle, AFAICT. While USD risk is heavily distributed across many regulated banks and there are measures in place to mitigate bankruptcy, USDC/T is fairly centralized and the fall of a single bank can put the entire currency at risk, cause sudden and extreme inflation (as is the case now), and potentially stop being accepted by…
Perhaps they could learn that doing consecutive 50-75 bps rate hikes for an entire year will bring with it a lot of adverse effects in a world where they are expected to hike 25 bps at a time? Nobody pricing interest rate risk would have priced what happened last year correctly - it would have been considered a one-in-a-million event, not a routine response to high inflation.
USDC is managed the Centre consortium, which was founded by Circle and includes Coinbase as a member. Circle held around $3.3 billion in Silicon Valley Bank, leading to a run on USDC which resulted in it trading for as little as $0.95 on some exchanges today (Mar 10, 2023). This represents around 30% of USDC's cash reserves and 7% of its total reserves. The balance of reserves are held in T-Bills, which are liquid an…
There's something deeply ironic about a flight to safety in the form of Tether , which has famously been described as being "quilted out of red flags". But if you can't redeem it and it's not backed by anything remotely approaching normal assets, I guess you can't have a bank run on it either... until the music stops and the insiders propping it up run out of chairs.
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So a bit like stable coins? And do you have a source?
https://wap.business-standard.com/article-amp/international/... https://amp.scmp.com/business/banking-finance/article/300879... https://enterprise.press/stories/2022/10/09/major-local-bank... https://www.aljazeera.com/amp/economy/2022/2/3/lebanon-us-do... > No withdrawals were allowed from accounts denominated in U.S. dollars, unless the owner agreed to convert the funds into pesos. https://en.m.wikipedia.org/wiki/Co…
So, there was neither a technological problem moving fiat in our out of the country that would be amenable to a technological fix, nor unintended weaknesses in the regulatory regime covering local banks. Rather, it was deliberate government policy.
Tether, the Sauron of stablecoins, has zero exposure to SVB and is holding the peg just fine. Sorry Patio and friends, maybe next time :)
Galaxy brain: don't hold verifiable assets at a real bank, don't care when the bank fails. Tether didn't hold its peg though; it went up to about $1.03. For a stablecoin going up is as bad as going down. https://coinmarketcap.com/currencies/tether/
Earlier quoted context omitted.
There's something deeply ironic about a flight to safety in the form of Tether , which has famously been described as being "quilted out of red flags". But if you can't redeem it and it's not backed by anything remotely approaching normal assets, I guess you can't have a bank run on it either... until the music stops and the insiders propping it up run out of chairs.
Tether is better run than any other stable coin. Yes, it could go to zero for many different reasons, but the main reason it gets so much flak (compared to other stables) is because it is less compliant with US regulators than USDC and the other major stable coins. Being less complaint with US regulators is also the reason it is used more than any other stable (highest volume by a wide margin); because people without…
Earlier quoted context omitted.
USD is backed up by USA army. If a country refuses to accept USD they will have a democracy problem and get attacked.
India is a developing country. Are you somehow under the impression that the US army will attack a coffee shop in New Delhi if they stop taking US dollars? Even in those parts of Mexico and Caribbean countries where the economy is heavily dependent on US tourism - and the US dollar will be accepted at retail shops; the price difference between paying in dollars and paying in local currency is going to be against the…
Earlier quoted context omitted.
There's something deeply ironic about a flight to safety in the form of Tether , which has famously been described as being "quilted out of red flags". But if you can't redeem it and it's not backed by anything remotely approaching normal assets, I guess you can't have a bank run on it either... until the music stops and the insiders propping it up run out of chairs.
Tether is better run than any other stable coin. Yes, it could go to zero for many different reasons, but the main reason it gets so much flak (compared to other stables) is because it is less compliant with US regulators than USDC and the other major stable coins. Being less complaint with US regulators is also the reason it is used more than any other stable (highest volume by a wide margin); because people without…
Only in the PR sense. A rug pull is inevitable.
On the bright side, when it crashes it'll take what's left of crypto with it.