https://www.coindesk.com/pf/resources/favicon/favicon-32x32.png?d=198 Stablecoin Issuer Tether Increases US Treasury Portfolio, Cuts Commercial Paper Holdings to Below $50M The firm had said it plans to bring its commercial paper holdings to zero by the end of the year. By Parikshit Mishra Oct 3, 2022 at 10:37 a.m. UTC Updated Oct 4, 2022 at 3:30 p.m. UTC
Don't you think though that we have to think strategically about what would happen to the price of bitcoin as an example in case there is a run on tether? First, it could play out two ways. One is a gradual decline over days like Luna, and then a total collapse, but still giving you time to get out. Or another is just some sort of halt on the blockchain so no chance to exchange your tethers for something else. But assuming that there is enough time to unload USDT, what will actually happen? Sure, some will try and get USD and then transfer that back out to their bank and be done with crypto. But I imagine far too many people are stuck in the crypto ecosystem, so all they will do is exchange their USDT for something else. And what is the safest crypto out there right now? Its obviously bitcoin. If USDT start collapsing, sure, some people might see this as a sign of further decline in the crypto space and dump bitcoin along with everything else causing the price to go down. But I honestly believe that the buying pressure from people exchanging USDT for bitcoin would more than overcome any bitcoin selling pressure. I partly base this on how I see the regular markets work. Bad news is now good new for the market. Yesterday the jobs report was strong, and of course the market tanks because it means no Fed pivot that everyone is waiting for. We therefore can't assume that USDT going down would be a negative for bitcoin.
Also, Bloomberg did investigation in 2021 by calling every desk in all major banks to check if anyone ever saw BitFinex trading commercial paper. The answer was not even once, and with 60 billion at a time, they would be top 10 commercial paper holders in the world. Easy get rid of something one never had to begin with.
Our regulators are just a complete joke and captured. The senate banking committee sent them a letter almost a year ago and nothing ever happens. It is outrageous considering they would be the 44th largest bank in the US.
I could never understand how Tether happened to still stay afloat so long... But then again, it's very similar to the US dollar, how despite the Milkshake is right in front of people, everyone just wants to stick their head into the sand and shout "Everything's Fine!"