[dillondoyle]

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 holdings. Which seems kind of interesting given the theories about some shady btc/usd/tether pumping cycle scam might be happening behind the scenes.

https://tether.to/wp-content/uploads/2021/05/tether-march-31...

[pja]

It’s not that long ago that Tether was claiming that all reserves were cash deposits.

Now something like 75% of the reserves are loans to ... well, who knows? My guess is other crypto-companies, but it’s impossible to tell.

(It’s also very weird to lump together “bonds” and “gold” in the same pot - these are completely different asset classes.)

If one were of a cynical turn of mind (and who wouldn’t be, given Tether’s history?) one might suspect that the commercial paper consisted of loans of freshly printed USDT to crypto companies & trading platforms who are using it to trade cryptocurrencies (because you can’t really use USDT for anything else at this scale). One might also suspect similar things about other entries in this breakdown.

Tether is a wildcat bank.

[jimmydorry]

I mean, this was exactly what Tether was made for. Moving large amounts of USD frictionlessly between exchanges without causing taxable events or losing money to spreads.

The top purchasers of USDT would be exchanges and "whales" (ranging from the extremely large crypto traders to the odd investment firms / hedge funds).

It wouldn't be surprising at all if the entities purchasing USDT are ultimately holding onto their USD but using the Tether issued to them and paying what essentially becomes just a transaction fee. As long as everyone can prove to Tether that they are good for what they purchase, the IOU trading scheme doesn't necessarily have to end in bloodshed / collapse either.

[dillondoyle]

Yeah I have no idea what the truth is. They aren't regulated it seems. But my point was this isn't a news report, it's labeled opinion. And reporting only on what Tether released I think the headline is clickbait and article lacks context of what marketable securities means.

[Traster]

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 quite likely not to follow regulatory standards- which they actively claim to get around by saying they don't operate in the US (despite being a tether for USD)

[FabHK]

Also, Tether promises that at any time you can redeem a tether for USD (well, it doesn't really promise that either). Apple does no such thing.

[dkarras]

Doesn't matter what tether says because they are not audited. I could write "100% cash!" on a napkin and it would have the same credibility.

[ryanlol]

Not exactly, Tether has more credibility than your napkin given that they’re successfully maintaining the USDT peg despite huge volumes (for now)

[dkarras]

Following that logic, any obvious ponzi / pyramid scheme is credible and trustworthy until it demonstrably collapses?

You say tether is "maintaining" the peg but that information comes... from them. They are not audited. They are unregulated. You don't even know who is behind it. You won't see that they are not even close to solvent until a bank run occurs. It is easy to suspend disbelief as long as nobody requests their fiat from tether in cash in large volumes. In those huge volumes, no fiat is changing hands, so they can very easily run with no cash at hand as long as people believe they have the money.

When I looked at it in more detail a few years ago, they even claimed you are not entitled to the fiat in exchange to the usdt you buy, is that still true? Is there even any way to get any fiat from them directly? Sure, you can convert your usdt to fiat using an exchange by buying another cryptocurrency first - in this chain everyone "believes" tether has the money to back it up and that's why it works. It could work even if tether had absolutely no usd because there is no reason to touch that usd.

[ryanlol]

> Following that logic, any obvious ponzi / pyramid scheme is credible and trustworthy until it demonstrably collapses?

Credible and trustworthy? Of course not! Slightly more credible than a napkin with “100% cash” written on it? Of course.

> You say tether is "maintaining" the peg but that information comes... from them

That information comes from the exchanges where tether is traded.

>You won't see that they are not even close to solvent until a bank run occurs

Nobody is disputing this