Tether released their reserves breakdown, as required by the New York Attorney General. There's a lot of noise about it (OMG it is only 2.9% backed by cash!!) but this doesn't look that bad to me?pic.twitter.com/lRxPpGGMYI
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Big caveat of course - this is not audited, and you would probably want more information on e.g. who exactly are the companies backing the commercial paper? What assets are backing the secured loans?
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But if you feel okay assuming there is nothing untoward there ... we are happy to treat money market funds as cash so we should be more or less happy to treat USDT as cash too.
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The most incredible thing is that they have issued $58bn of non-interest-bearing crypto tokens and are investing the proceeds into short-duration interest-bearing financial instruments probably earning more than $500m/year, absolute king move.
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Trust but verify If you can't verify then you can't trust
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So is it fully backed and no debt?
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Except 2a-7 money market funds went thru huge reforms post-GFC and strict rules were put in place to make sure they don’t blow up and we can treat their shares as cash... Not sure we can say the same for USDT
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Agree, you would definitely want more disclosure than this (and I find it *very* unlikely that this will satisfy the NYAG)
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So....looks, smells, feels, and acts like a security. Just not registered like one. No KYC or AML either. Got it.
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