Is Tether being questioned again? Industry pros are arguing over reserve issues.

Question

The "big brother" of stablecoins, Tether, has recently come under fire. Arthur Hayes, the founder of a certain exchange, directly fired shots, saying that if BTC and gold prices collapse, Tether&#39;s assets might not hold up, and their equity buffer could be breached in an instant. However, former Citigroup analyst Joseph Ayoub quickly jumped in to rebut—are you only seeing the tip of the iceberg? Their complete balance sheet is laid out, and with equity plus a large amount of government bonds, their ability to absorb losses is quite strong.The real dilemma actually lies in the old issue of liquidity. Most of Tether&#39;s reserves are not in cash; in the event of a run on the company, can these assets be quickly liquidated? Although the company presented a report showing over $2 billion in redemptions in a single day in 2022 to prove itself, the market still remains skeptical. After all, in extreme situations, the numbers on paper and actual redemption capabilities might be two different things.

quiet_lurker · Accepted Answer

Another round of Tether controversy, it&#39;s really quite annoying.

UnruggableChad · Answer

I&#39;ve said it long ago, I&#39;m tired of Tether&#39;s rhetoric. Can the numbers on paper be eaten? When it really comes to dumping, it will only be a mess.

GasFeeSurvivor · Answer

To be honest, I was just watching the commotion between these two people arguing. The key is when the extreme market conditions will arrive. A daily redemption of 2 billion dollars sounds intimidating, but what if a real black swan comes flying in? Paper value ≠ real money, and this is a principle that everyone understands.

FlashLoanLarry · Answer

liquidity depth on usdt reserves? paper vs realized, classic tale. hayes isn't wrong tho, equity buffers evaporate faster than you'd think when btc corrects hard. joseph's thesis sounds academic until stress test hits different...

StablecoinAnxiety · Answer

Here it comes again, does the USDT meme have to be stirred up every year?

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Arthur Hayes says it will crash, and Joseph is not wrong for firing back, anyway, I don&#39;t trust any stablecoin.

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Liquidity is the real issue, can 2 billion on paper be redeemed, can it hold up in extreme market conditions? A question mark.

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It feels like every time the USDT crisis theory comes up, the market doesn&#39;t react much, which shows that everyone is already used to it.

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Instead of getting tangled up with USDT, why not think about which stablecoin is really stable...

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The description of a rights buffer being breached sounds scary, but when extreme market conditions come, everyone is the same.

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They are arguing fiercely, but neither has mentioned what I want to know the most—how much real cash is there.

QuorumVoter · Answer

USDT is pulling this trap again? The balance looks great but can&#39;t be withdrawn at all.