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Comment by AlexandrB | Hacker News Reader

In related news, Tether has minted $3B USDT in the last month: https://beincrypto.com/tether-mints-three-billion-usdt-past-...

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Yes, and although likely a scam, here's another datapoint:

Coinbase, an Y combinator unicorn, is behind Centre/Circle and the USDC stable coin. And there are now $41.5 bn USDC circulating.

At one point it was billion of USDT circulating and USDC didn't exist yet.

Then USDC began to took off and there were, out of memory, $5 bn USDC and $23 bn USDT.

But, overall, the trajectory is clear: USDC is growing faster than USDT.

It's $41.5 bn vs $76 bn today.

Maybe in a few months USDC shall catch up, then maybe even surpass USDT.

Do we all believe Coinbase and its Centre/USDC stable coin is a scam? It's an american company, with real people behind it. It's not some scammy thing in the Bahamas.

Now here's an intriguing question: if we believe Coinbase isn't a scam and that these $41.5 bn USDC are really mostly or all backed, does tether's $76 bn really look that unthinkable?

Another datapoint: USDC minted 7b in the last 30 days. Does 3b tether in the same time period seem unreasonable?

The problem with tether is not the amount minted/in circulation. The problem is that they definitely lied previously about their backing and are probably lying now. If you claim to be one of the worlds largest commercial paper holders yet no one knows whose commercial paper you are holding then that is suspicious. It’s unimaginable that a new large player entered the market and nobody noticed.

> It's an american company, with real people behind it. It's not some scammy thing in the Bahamas.

Oh yes I forgot Americans can't be scammers.

That's a pretty uncharitable interpretation.

Americans who are under the watchful eye of a hostile SEC and face serious prison time if they get caught are much less likely to be scammers than some anonymous group from the Bahamas.

Issuing stablecoins isn't a scam by itself. The whole crypto ecosystem cashflow is the real scam. There is no liquidity. All it takes is a few people that panic and the whole thing falls apart, UNLESS there is someone ready to print money and prop up the market when panic sets in. That is why people need to understand what is going on with Tether. Bernie Madoff got shutdown because a whistle blower got the SEC to look at his books. If tether gets shutdown and no one is propibg up the market, it will crash hard.

China has banned Bitcoin several times, there’s been hacks, there’s been central banks going after crypto - yet it’s still here. Why do you believe the whole thing might fall apart?

What you’re missing is that whenever there’s panic selling there’s always someone on the other side finding a great discount.

That is what they said about housing in 2007. I'm not saying that crypto is going to go away and never exist. I'm saying it could go down by 80% during a liquidity crisis induced panic.

Yeah, also bitcoin isn't a stablecoin, there were never any guarantees.

> It's an american company, with real people behind it. It's not some scammy thing in the Bahamas.

All scammers are real companies with real people behind them. Until they aren't. Location of a company doesn't matter.

"Ponzi Scheme" literally comes from a man who was scamming his victims in the US and Canada.

> It's an american company, with real people behind it. It's not some scammy thing in the Bahamas.

Enron would like a word!

Its also being used as the currency for now ousted Myanmar govt https://www.aljazeera.com/economy/2021/12/14/myanmar-shadow-...

Hang on, minting and circulating are different things. The USDT circulating supply is currently approximately 76 billion.

Literally nobody claimed otherwise.

Right, they minted $3B, taking the circulating supply from $73B to $76B.

Do you have any evidence of that other than the parent link which looks kind of scammy? Everywhere else I have read that the minted $3B is not circulating yet, it's waiting for new purchasers of Tether. Not saying you are wrong by any means, I'm genuinely curious.

What does "minted" but not circulating Tether even look like?

Tether minting coins and holding them until someone comes along and exchanges dollars for them.

Tether mints the tokens upon deposit of fiat on Bitfinex exchange OR when the Tether peg increases above $1 too far. Users are incentivized to do this as well (deposit dollars onto bitfinex, get new tether for that 1:1, sell new tethers above the peg on the open market, pushing the peg down)

Circle/Coinbase use the exact same mechanism.

These kinds of stablecoins are destroyed only upon explicit redemption. Not when sold to someone else on the open market.

It’s not that different from a brokerage account’s deposits. People don’t actually withdraw that much because they don’t need that much cash. They keep their cash in those ecosystems waiting for other trading opportunities and add more from other sources into the exchange.

I know it’s absurd to assume tether functions as described, 99% of the time for 99% of the value. But the market is showing the same thing with stablecoins that are better governed.

For the decentralized/permissionless/uncensorable minded people, The best bet is for other kinds of stablecoins to grow faster

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