If you send BTC to Bitfinex, and buy USDT, they can always supply as much as you need. But if it were backed by USD, then they should have supply issues during high demand, at least temporarily. It actually appears they are creating USDT at the market price of BTC. Oddly, when BTC drops in price, you'd expect them to destroy USDT to keep the peg as BTC value that lead to the creation of USDT was lost. But, they actually printed more as BTC fell. I didn't see if they quarantined more however, perhaps that's how they are propping up the price?: https://wallet.tether.to/transparency They don't do this. An audit would be easy. That's what stinks the most. If they could audit, I am sure they would. I definitely wouldn't hold any.All tethers are pegged at one-to-one with matching fiat currency (e.g., 1 USD₮ = 1 USD) and are backed 100% by actual assets in our reserve account. As a fully transparent company, we publish a real-time record of all value held and transferred in and out of our reserve account.
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.