the market does not seem to care. we are indeed living in a post-truth era.
Tether reserves backed by 2.9% cash
81–90 of 183 posts
Re: Tether reserves backed by 2.9% cash
#82Earlier quoted context omitted.
Where did you get “72 hours” from? That got me curious about what their rules actually are. From their terms of service [1]: > Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of…
It's a pyramid scheme, Works until people start to pull out their money collectively
Insolvency is different from illiquidity.
Re: Tether reserves backed by 2.9% cash
#83Earlier quoted context omitted.
Where did you get “72 hours” from? That got me curious about what their rules actually are. From their terms of service [1]: > Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of…
It's a pyramid scheme, Works until people start to pull out their money collectively
Not quite a pyramid scheme.
The basic scheme is:
* Issue crypto pegged to the dollar
* Hold interest-generating reserves
* Collect interest
I externalize risk, but it's a relatively low risk. That's different from a pyramid scheme.
Low risk isn't the same as unimportant risk. The whole point of crypto is to mitigate very similar sorts of systemic risks. Cash works pretty well most of the time.
Re: Tether reserves backed by 2.9% cash
#84the market does not seem to care. we are indeed living in a post-truth era.
Give it time. Almost no one knows what Tether is. It's also a really technical, and thus niche, topic, not a lot of people understand the scam. Eventually a regulator body will finally do something about it.
Re: Tether reserves backed by 2.9% cash
#85Why print money when a private company can just create its own? Just imagine what's going to happen when there's a bank run on Tether.
The same of what happens in a regular bank run, cash conversions are delayed.
That being said, the comparison is not totally fair.
In the regular fiat banking system a bank run, the withdrawal of most deposits, destroys a bank because it fails to meet the reserves ratios mandated by the system.
In the case of Tether there no such requirement and the reserves are liquid enough to meet the withdrawal requests in about a month - at least 2 workdays days for cash-like reserves liquidations, 2 workdays days to wire to cash to exchanges. Non-cash-like reserves might take longer but 2 weeks should be enough. Since Tether reserves aren't that being on each asset class and overall market probably won't trigger their own reservers depreciation.
That being said the actual exchange rate on the exchanges will this happen will drop because people will panic sell and not wait for Tether company to meet their sell orders at 1USD.
Re: Tether reserves backed by 2.9% cash
#86Why print money when a private company can just create its own? Just imagine what's going to happen when there's a bank run on Tether.
The whole modern banking system is run in the same way. Private banks create money as loans, but they are backstopped by the Fed and there's the FDIC insurance up to a certain amount. Tether might also create money but there's big additional risk because it doesn't have access to the Fed.
Re: Tether reserves backed by 2.9% cash
#87As 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...
You missed the "USDC hasn't published audits since Jan 2021" https://amp.reddit.com/r/CryptoCurrency/comments/mycfm9/usdc... now February is the last report. They just reported February a few days ago.
Re: Tether reserves backed by 2.9% cash
#88Does it really matter when banks have a reserve requirement of 0% since 2 years?
I believe the U.S. minimum requirement is currently at 10%, but you do remember how bad it all came crashing down 13 years ago, right? So yes, it does matter if we let financial institutions disregard risk in the pursuit of profit, when they are gambling with other people’s money. In the case of Tether though, it’s not a traditional bank that issues interest yielding loans based on the lender’s credit profile. Rather…
The OP just told you it's 0%, and he's right. Reserve requirements have been abolished for the past 2 years, and even before that, banks could easily conjure reserves when they needed. That was the whole point of the QE programs run by the Fed.
Edit: another poster linked the actual Fed announcement and it is actually 1 year since the reserve requirement has been lifted.
Re: Tether reserves backed by 2.9% cash
#89I 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…
Shifting all my savings to ScamStableCoin this evening! To the moon!
Re: Tether reserves backed by 2.9% cash
#90Does it really matter when banks have a reserve requirement of 0% since 2 years?
I believe the U.S. minimum requirement is currently at 10%, but you do remember how bad it all came crashing down 13 years ago, right? So yes, it does matter if we let financial institutions disregard risk in the pursuit of profit, when they are gambling with other people’s money. In the case of Tether though, it’s not a traditional bank that issues interest yielding loans based on the lender’s credit profile. Rather…
https://www.federalreserve.gov/monetarypolicy/reservereq.htm
"As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions."
I experienced time very differently the past year. I thought it was two years already. But I'm sure there was another announcement similar to that earlier.