Tether (USDT) is launching on Coinbase Pro | Hacker News Reader

Tether (USDT) is launching on Coinbase Pro

blog.coinbase.com

23 pointsWA9ACE16 comments

> For stablecoins like USDT, the company behind the protocol is responsible for holding reserves that fully back each token. The company behind Tether, Tether Limited, claims to hold reserves that fully back each USDT. As of 2021, USDT is the most widely-used stablecoin in the world, with a market cap over $30 billion.

Has Tether ever proven that the coin is backed by $? It's fine to claim that, but I'm pretty convinced the $ doesn't exist and would like to see some proof otherwise.

"Indeed, a Tether lawyer said in 2019 each USDT was only about 74% backed by fiat equivalents."

What's a fiat equivalent, because it sure doesn't sound like a $?

>What's a fiat equivalent, because it sure doesn't sound like a $?

Government bonds

Tether themselves issued a shady statement saying something like they where backed 70% by dollar holdings, or crypto equivalent. Essentially meaning that as long as they don’t pocket 100% of the money you pay them. And as long as they mint twice the amount of tether using one to back the other, well they they are technically not lying. But reallity is that if enough people tried to withdraw dollars for tether the coin would collapse and the masterminds would suddenly “die of some obscure disease in India” with all their wealth disappearing with them.

They are backed by cryptocurrency. You can literally say this is a truthy statement. Print USDT, buy BTC, now you have BTC to back your USDT.

how old is this quote? It’s 50 billion https://coinmarketcap.com/currencies/tether/.

It’s an incredibly shady coin. No doubt it was a lot of work by Coinbase to onboard it.

For stablecoins, I think normal people dont think thar much about the shadiness but more if it works or not. Tether has been keeping their stablecoin stable for 6+ years, for normal users it looks good for quite wide variery of uses. Of course no one is saving their pension in USDT but there are lots of shorter term use cases.

> For stablecoins like USDT, the company behind the protocol is responsible for holding reserves that fully back each token.

I don’t think full backing is technically required for a stablecoin. OTOH, such a promise, if believed, helps a stablecoin stay stable, and having made the promise it becomes the firms obligation.

It is now for regulation-compliant stablecoins. Also KYC checks and AML blacklisting.

Does this mean that Dai (which does relies on market mechanisms rather than than reserves) is not compliant with regulations, but USDT is? Which regulations?

Yes. https://tlaib.house.gov/sites/tlaib.house.gov/files/STABLEAc...

I don’t know what that means for DAI. An interpretation of the law may mean that exchanges would not be able to sell it. And the owner would normally be liable for breaking the law, which is every MKR holder, so I don’t know how they plan on doing that.

But honestly, it never works out that way. Laws get passed, regulators take out easy targets, and the big guys tie them up in court until they get the laws they want.

They'll be able to easily go after centralized collateralized stable coins, not so much for decentralized ones (except to the extent that the collateral is centralized, if any collateral exists at all [i.e uncollateralized algo stable coins])…

Well it has been called into question since tether began. Not helped my them paying an SEC fine recently for not backing it fully. It is still questionable if it is fully backed or not, with evidence or support not being supplied by the company behind it.

US government fining alternative currencies!? Of course they do any loss by US dollar is a loss for the fed.

I find it funny that people are OK with fractional reserve banking but find Tether not having 100% of their supply proven.

It took a lot of regulation and government-backed insurance to make people ok with it.

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