Tether has, unless they have the most incompetent representatives in the financial industry, just confirmed that they do not have USD backing all outstanding tokens.
(This has long been suspected to be true at least some of time; @Bitfinexed was on the case about a year ago.)https://twitter.com/CoinDesk/status/1051983963651223552 …
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I like: Lack of internal controls (or outright fraud) means a crypto company accidentally implemented fractional-reserve banking when it tried to implement blockchain banknotes.
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Just wait until Silicon Valley invents an organization that insures cryptocurrency wallets up to $250K across compliant blockchains, some sort of Federated Deposit Insurance Chain, or FDIC
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crypto rich, paper poor
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What a horrible mess this is.
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they might not have the reserves, but could still have liquid assets and be able to do capital calls when needed?
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Hooray fractional reserves! This system is so much better than the legacy system
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Can’t wait to see this exacerbated by Liquid
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well regardless of the wording the distinction is actually irrelevant in terms of the markets view because USDT value is and has been based on the full faith&credit of BFX to continue to pay out withdrawals 1:1. That is why banking frictions impact USDT price as arb breaks down
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