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Comment by TazeTSchnitzel | Hacker News Reader

The vast majority of the Tether market cap is fake money (not actually backed by USD). It will collapse if enough people try to cash out.

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As per terms of settlement with NYAG, Tether will be disclosing details of their reserves on a regular basis from now on to NYAG, let's see how fake USDT is - NYAG seem satisfied for now that it is backed by full reserves.

They recently released “details” and less than 3% of Tethers are backed by actual USD.

I don't like Tether as it's no different from fractional reserve banks, but as long as the NYAG remains content with what she sees, it's sound money. Been waiting its supposed collapse for half a decade now with bated breath, but it still has yet to happen.

Disclaimer: I own zero USDT and an insignificant amount of USDC, being rather skeptical on "stablecoins" in general.

NYAG stated that "Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie" and banned it entirely from New York.

"I don't like Tether as it's no different from fractional reserve banks,"

That reserves don't add up to the currency in circulation is somewhat similar to a central bank but the similarities end there and they are basically nothing alike.

Will a government bail out Tether when its institution goes bust? If not then, then it is far worse than fractional reserve banks.

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