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The two are incomparable.
How are they any different? They both do fractional reserve banking. If anything, Tether is more robust because they aren't controlled by central banks.
Tether's balance sheet: https://wallet.tether.to/transparency Balance breakdown: https://tether.to/tether-releases-breakdown-of-its-reserves/
Also I didn't know what commercial paper is but it is apparently a very short term loan up to 270 days: https://corporatefinanceinstitute.com/resources/knowledge/cr...
As a comparison, USDC reserves are 100% backed by US dollars held in custody accounts, currently 9.3B. https://www.centre.io/hubfs/pdfs/attestation/grant-thorton_c...
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It’s an interesting thought isn’t it. Many of us in the haze of an enlightenment narrative in the 90s thought the web would empower through a decentralised model, and while it’s done that of course, it has also created powerful new sources of centralised power, monopolies, and walled gardens, that have challenged (and often won against) existing legal, societal, and political structures and norms. It starts feeling a…
> What does international trade, yet alone your annual tax return, look like in a world in which “govcoin” is just one (and a lower preferred one at that) of many currencies used day-to-day? That's already a reality for many companies doing international trade. Especially global special-purpose device producers from smaller countries. It's annoying with paperwork and dealing with "what price was actually paid at the…
What do you think it means for the stability of nation states, either domestically or on an international scale, in such a world though?
It’s the increasing practicality of doing this (buy your breakfast in StarbucksCoin, your lunch in McCoin, and your groceries in WalCoin) that makes it more possible as a reality.
But how does a government have credibility and get taken seriously domestically if the currency they control is increasingly irrelevant day to day? How does the US continue to maintain leverage over energy costs? Etc.
The pitch is clearly a lie, but I'm also not too worried about them counting commercial paper and t-bills as "cash."
https://amycastor.com/2021/05/13/tethers-first-breakdown-of-...
And quite a few exchanges are offering crazy interest rates (up to 10%) for USDT deposits, which strongly implies they're getting some for free:
https://cryptoprijzen.com/en/crypto-interest/compare-tether-...
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A random individual in the street can do fractional banking too, and by that reasoning is more robust than a bank. Why would you specifically trust Tether with your money?
I would trust a random individual more than a bank. There is a chance that the random individual might be honest... On the other hand, I know for sure that banks are running a pyramid scheme.
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> What does international trade, yet alone your annual tax return, look like in a world in which “govcoin” is just one (and a lower preferred one at that) of many currencies used day-to-day? That's already a reality for many companies doing international trade. Especially global special-purpose device producers from smaller countries. It's annoying with paperwork and dealing with "what price was actually paid at the…
Good examples. What do you think it means for the stability of nation states, either domestically or on an international scale, in such a world though? It’s the increasing practicality of doing this (buy your breakfast in StarbucksCoin, your lunch in McCoin, and your groceries in WalCoin) that makes it more possible as a reality. But how does a government have credibility and get taken seriously domestically if the c…
> But how does a government have credibility and get taken seriously domestically if the currency they control is increasingly irrelevant day to day?
The monopoly use of force is still a thing that demands respect.
As a comparison, USDC reserves are 100% backed by US dollars held in custody accounts, currently 9.3B. https://www.centre.io/hubfs/pdfs/attestation/grant-thorton_c...
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…
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.
This is an opinion piece and the headline & article are clickbait IMHO. From Tether's chart, they literally have 2.9% in cash. So I guess the headline technically checks out. But Tether reported over 75% held in cash equivalents, the same type of liquid assets Apple reports when reporters say Apple is sitting on billions in 'cash' I think maybe more interesting, Tether reports only 1.64% slice of pie has some crypto…
The difference betweeen what Tether says and what Apple says is that Apple actually have to follow regulated practices in reporting their cash. All that Tether is saying is that they have about half their reserves in commercial paper with no details of what the risk profile of that is at all. And given that they don't need to report this to anyone, and they'd get to keep all the profits from riskier bets, it seems qu…
The pitch is clearly a lie, but I'm also not too worried about them counting commercial paper and t-bills as "cash."
What if "crypto-exchanges" just means Bitfinex and no-one else.
You notice that they carefully said the secured loans were against non-partner entities. They said nothing of the sort about the commercial paper.