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comment by kleinbl00
kleinbl00  ·  2257 days ago  ·  link  ·    ·  parent  ·  post: The Tether Conundrum

So Tether claims to have thirty million bucks in reserve. They have a market cap of like a billion dollars. That's a 3% fractional reserve - if they were a legit US thrift they'd need a hundred million but that's probably new to them because until you're at $110m your reserve requirement is 3%.

Look - I wouldn't buy any. The whole idea is dumb. But all they're doing is pretending to be a bank while also playing the ponies with other peoples' money. Sure - they claim to be 100% backed but they obviously aren't because if they were their currency would inflate and defeat the whole goddamn point and everything blows up.

I'm fully willing to believe that they claim they're "100% backed" the full reserve requirements which would have been 3% because that's the sort of stupid shit the crypto sphere is doing these days. Which, yeah, is bullshit. Audit? Yeah, I have as little faith in that as you do. I guess I'm so jaded that I wouldn't trade with anyone who wanted to trade my dollars for coupons period. You can solve that one by inspection.