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by Acrobatic_Road 1867 days ago
Uh, this chart looks surprisingly good. Does it matter it tether is partially backed by "cash equivalents" such as t-bills? If those aren't good for cash, believe me, tether is the least of your worries.

I'm more interested in the other 25%. Does anyone know what it is?
1 comments
Marazan 1867 days ago
The level of detail they have given for "Commercial Paper" means that it is worthless.

Commercial paper makes up about 50% of Tether's balance book.

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Acrobatic_Road 1867 days ago
Is it? Commercial paper is short term (<9mo), and tether is a long term project. So, unless the composition of tether's backing has changed substantially in the last few years (and I remember them stating years ago that it was mostly these "cash equivalents"), then I'm not really worried because it sounds like their borrowers* have been paying them back.
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jimmydorry 1867 days ago
It feels like people don't understand Tether. Tether was originally created to be an intermediary between exchanges and anyone that wanted to move large amounts of USD without paying price spreads to buy / sell on either end.

Tethers are essentially IOUs pegged to USD. While the Tether organization may have originally waited for the Tether purchaser to transfer the money into their accounts before issuing the Tether, by 2018 at the latest, this has to have changed when Tether was forced to cease dealing with US citizens. If not from the start, their model of trust must have allowed their large clients (the exchanges, etc.) to hold onto the USD and instead issue "Commerical Paper" to back the Tethers issued.

Tether obviously isn't going to reveal the exact arrangements here, and from the outset, their claims of having bank accounts with billions of dollars was suspect... but this revelation has been nothing new, and if anything, things look positive now. Tether doesn't appear to just be printing Tether with absolutely no backing.

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raducu 1867 days ago
Wow, that is some serious rationalization right there.

Am I the only one remembering them claiming to be fully backed by USD in some bank accounts?

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jimmydorry 1864 days ago
I certainly remember it too. I even mentioned it in the comment you replied to!
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DebtDeflation 1867 days ago
>Tether doesn't appear to just be printing Tether with absolutely no backing.

Is there a difference between just printing them for the exchange you also own and just printing them for the exchange you also own in exchange for an IOU from that exchange that you call Commercial Paper?

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