Once again, this demonstrates a complete misunderstanding of fractional reserve banking. Fractional reserve banking is how new money enters the financial system. When you borrow money for, say, a mortgage, new money is created - alongside a liability on the banks books. [edit: This liability is what gives fiat value - money is always 100% backed by the demand for that money].

As you pay off your loan, the new money that was created is destroyed.

This is how the money supply is actively managed, it's not some tinfoil hat conspiracy haha.

There is also a 1/2 trillion dollar fund (FDIC) and a further 1/2 trillion dollar line of credit at the Fed to ensure depositor funds are secure.

The federal reserve, created via act of congress, exists to manage the money supply - to maintain a low, fixed rate of inflation and maximum employment. These two features are correlated, by the way, as you can see in the Philips curve.

Now, Tether on the other hand is just printing fake money to pump up the market to benefit themselves and a small cabal of crypto holders who recognized early on the liquidity did not exist to support their desired level of wealth.

They lie about it regularly - in fact their announcement of this settlement included a bald faced lie.

> Tether: "As to the Tether reserves, there is no finding that tether tokens were not fully backed at all times—simply that the reserves were not all in cash and all in a bank account titled in Tether’s name, at all times."

> CFTC: "In fact Tether reserves were not “fully-backed” the majority of the time."

This is the central bank of crypto, 85% of all trading volume is against USDT, and they have shown themselves to be the least trustworthy entity in the world. Just a new Liberty Reserve.