[jcranmer]

> Here's a way to reality check the difference: if 90% of Tether holders redeem their deposits tomorrow, 100% of them will get their money back and Tether Ltd will remain 100% solvent and liquid.

That's not true. If you read Tether's own description of its reserves, most of it is not in cash. The largest single component is commercial paper; if Tether needed to redeem every single depositor, it would have to fire-sale something like $20 billion of commercial paper. It's also not clear how good quality that commercial paper actually is, and whether its value is what Tether claims it to be--given the shenanigans they've done in the past, and the lack of anyone else in the financial system apparently transacting commercial paper with Tether, I would speculate that a good portion of that is basically Tether loans to cryptocurrency companies that are hand-waved to be commercial paper because Tether is unregulated and isn't required to follow regulated accounting rules to break down its reserves.

It's rather specious to claim that we can't analyze Tether under the spectrum of bank regulation because banks can create money out of thin air when creating tether out of thin air is precisely what Tether is accused of doing.

> Where would you rather have your money?

I'd rather have my money in the institution that is required to spend reams of paper proving that it's solvent than the one whose attestation amounts to "we're solvent, we pinky swear" and has refused to provide any more details on the basis of "crypto is too complicated for anybody to audit."