[vmception]

Generally Western people do not believe in Tether. People believe in it regionally.

The counter argument is that Tether's growth is the exact same as USDC's growth and other stablecoin's growth, especially those that are structured in the exact same way, with 1:1 redeemability for fiat somewhere. Some of those, people like the level of validation they show, others have undermined trust and never show the level of validation that people want.

Tethers are primarily created upon deposit into Bitfinex. Any fiat deposit. And are only destroyed upon redemption, but people rarely do that because they often just trade out or sell the Tethers. This is akin/analogous to Robinhood creating a RobinBucks whenever a deposit hits. We would see the growth of RobinBucks redeemable 1:1 for dollars. We don't see that because Robinhood and other exchanges don't do it that way. But if a popular exchange did that, we would see what that really looks like and say "ah, this isn't strange actually, we just weren't used to this level of transparency". Redemptions would be low because people don't really leave their brokerage/investing accounts, they just sit in cash waiting to buy a dip... in their brokerage accounts.

Finally, multiple US authorities have looked into Tether multiple times. Typically their fines have been about a combination of A) not being 100% backed by dollars at some point in time and B) not disclosing that. Meaning that at one point and subsequently, Tether did match their level of review, and at one point was backed 100%. Tether has had skepticism from the day it was created nearly 10 years ago, and a US authority got all the information was like "well that one time in 2018 we didn't like that". Tether is not 100% backed by dollars, it mostly is though. The standard is better than other respected financial institutions.

Let there be a run, I don't like to use Tether. I don't like algorithmic stablecoins more. There are options now, those options are holding up. Regardless, Tether isn't as complicated as people think. There are other reasons to avoid Tether and all centralized stablecoins that can be frozen address by address, or by losing access to their bank account. Remember when that was the criticism? Probably not.

Its also easy to see how and why it does work so swimmingly, despite all the questions and criticism. And thats because someone can arb really well and reliably.

[shkkmo]

> Meaning that at one point and subsequently, Tether did match their leel of review, and at one point was backed 100%. Tether has had skepticism from the day it was created nearly 10 years ago, and a US authority got all the information was like "well that one time in 2018 we didn't like that". Tether is not 100% backed by dollars, it mostly is though.

This is some serious spin and misinformation. I can't believe you'd post this with a straight face.

The "100% USD backing" was at best more like 67% at the end of 2021, the rest is "commercial paper".

The "US authority" (OAG) was more like: you lied repeatedly about how you were backed, here's a big fine and you aren't allowed to do business here (New York) anymore.

Edit: The only reason we know that Tether was 2/3rds backed at the end of 2021 is because they are required to share that information as part of the settlement with the OAG.

[vmception]

CFTC, DOJ, and NY OAG

Yes, I was referring to the NY one, and I'm referring to how they were like "okay you went unbacked in 2018 and didn't disclose that to our standard, but at least disclose that its not USD". So now they paid a fine and disclose that. So at one point they were 1:1 USD, which is actually a major revelation because from 2014-2018 the same Tether FUD existed the same as now. In any case, now they aren't backed 100% USD, which is more relevant. Dollars and commercial paper isn't... horrible. Maybe they have a liquidity issue if 2/3rd of Tethers were attempted to be redeemed, maybe they don't.

[shkkmo]

> So at one point they were 1:1 USD, which is actually a major revelation

Is it a revelation or something you made up? NY OAG was confident they were able to prove that that Tether lied about backing in 2017, 2018, and 2019. Just because they don't have sufficient proof that Tether lied prior to 2017, doesn't make it a revelation that Tether was telling the truth. Indeed, given the trend, it seems quite reasonable to think that Tether was lying about backing at some point in 2014, 2015, and 2016. Who knows how much, they certainly aren't trustworthy.

[vmception]

ah okay, thats a perspective.

[shkkmo]

I'm curious why you feel the need to try to distort and spin stuff to benefit a company like Tether? They don't deserve your loyalty and they help give the crypto community a bad name.

[vmception]

It was actually my understanding of the situation, I feel I gave a balanced view. Not everything bad, not everything good. Like most things: somewhere in the middle and everyone is too emotional to look. It was new information to me that NYAG simply didn't investigate prior years at all, that's not the impression I got when I was reading that case. I think its an interesting way of reading it, like I said, a perspective.

Tether also grows in the same trajectory as USDC. or said another way, USDC grows in the same trajectory as Tether. That means if we were willing to assume it is actually functioning as detailed, then the same global sentiment perpetuates stablecoin growth.

What part of anything I wrote gave you the impression I have any loyalty to Tether. I was pretty explicit about the opposite of that.

> Let there be a run, I don't like to use Tether. I don't like algorithmic stablecoins more. There are options now, those options are holding up.

You're grasping just because I'm not auto-admonishing them. That's not necessary. It mostly works because its mostly dollars, the western-retail trader fud is not matched by western institutional sentiment[0], and is definitely not matched by eastern retail or eastern institutional sentiment. There is no surprise untethering, it would come from redemptions causing a liquidity issue after the dollars are all redeemed, or a crisis of confidence when redemptions are actually cut.

[0] https://www.bloomberg.com/news/articles/2022-05-12/money-mar...

If Tether's $25bn of commercial paper needs to be sold during a redemption run, after its $50billion of tethers were redeemed for dollars, then at that point there would likely be a liquidity issue spreading further to the all the Defi apps as Tether confidence shrinks, and some contagion to the "money markets". But the money markets should be able to absorb this size, commercial paper is a huuuuuuuge market.

The boogeyman stuff just is ... overblown. There is an objective reality, its not that bad, and doesn't mean you have to use it either way.