Hacker News Reader

Comment by aritmo | Hacker News Reader

> 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.

View on HN

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 $?

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.

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

Government bonds

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.

Reply on news.ycombinator.com