Convenient scheme. Tether USDT can be backed by the dollar only partially

It seems that Facebook Coin gave an excellent idea of the company’s Tether, which is accused of endless issue stablon USDT. The company has quickly made changes in the content of your website. Now it says USDT supported by “cash equivalent”. How exactly — not specified. Innovation has caused another outrage in the community. Users claim that the company is not declared on the regulations.

We will remind, earlier the company vowed that every USDT backed by a real dollar. According to Frances Coppola in Forbes, the wording of the company “cash equivalents for liquidity support token” may refer to other cryptotokens, whether even Bitcoin. According to Coppola, now Tether works on the principle of “very risky fractional reserve banking”.

Fractional reserve banking is a financial model in which banks keep in reserve only a small portion of client money. The remaining funds are used for the distribution of loans and payments to clients interest on deposits. Although this model is good for the banks under the regulation of the fed, it may not work for coins that needs to maintain a stable price. And this is especially true Tether, which reinforces your stablein the “other assets”. They can even be oil prices which fluctuate on a daily basis.

See also: Have Tether will be a new version USDT — stabilin on the blockchain Tron.

This news only raises more questions to the already undermined the credibility of the Tether. We will remind, at the end of last year, the company representatives saidthat only in one of their vaults is $ 1.8 billion. To confirm these data difficult, since the company long ago severed relations with follow-up by the auditor and a long time is not investigated. More data look at cryptodata.

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