[pfisch]

>The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve.

Banks are insured, and in general they haven't failed for the last like 100+ years.

I do think what you are saying about usdt is mostly true though, however if(when) usdt does fail the entire market will take a dive off a cliff. So even if your assets are in other cryptos it still represents a systemic risk to the entire system.

[deadbunny]

> Banks are insured, and in general they haven't failed for the last like 100+ years.

Thanks to massive bailouts you mean?

[pfisch]

The mechanism really doesn't matter as long as they are secured.

[SkyMarshal]

>Banks are insured, and in general they haven't failed for the last like 100+ years.

Not sure what you're trying to say here, given Bear Stearns and Lehman just failed ~11yrs ago, and the entire banking system would have imploded if not for trillions in Fed lending support and govt stimulus.

[arcticbull]

Not only were those investment banks, they were insured by the SIPC which actually protects the investments they've got on deposit. In 2008 WaMu and about a local bank a week went under and yet thanks to the FDIC no retail banking customer lost a single penny. That's why it's there. I swear if ECON101 was mandatory crypto wouldn't exist.

[pfisch]

Those were not consumer banks. I don't think anyone actually lost their account balances.

[arcticbull]

That's the SIPC for ya (https://www.sipc.org)