Anyone who follows this blog of mine knows that I'm not the biggest fan of Tether. Of course, I understand the current need for a stable coin, but at the same time I'm not convinced that it's something that will outlast these times or that the best way of doing it is by issuing backed assets. Not only because of the gray areas involved, the elements that can be easily taken down by legislative entities, but more so because of what we don't know, and the potentiality for manipulation.
There are some prominent voices on this space on both sides of the debate. Some say that the dollar itself is not backed by anything, then why would it matter if tether is not backed as well. To this over-simplistic analysis all I have to say is one word: consensus. Most of the world agrees on the value of the dollar but the opposite is USDT.
One curious thing that really jumped at me this morning, is their updated information regarding how they "back the assets". As far we understood, or to be more precise, I understood, the idea was always that tether held one "physical" US Dollar for every token they would effectively print. These tokens would then be redeemable through their infrastructure, and this would make them as good as money. If we add to this somewhat shady idea, the fact that audits have never truly been done, we can clearly see how this whole thing smells like a ticking time bomb.
There is probably little need for me to point out the problem here. I mean, how can a serious business use these instruments for backing their asset. To be fair, there is risk everywhere in the cryptosphere, but this doesn't mean that it's OK to add more risk to the table, and it certainly does not look well for the cryptospace as a whole.
As you can imagine, memes are flying everywhere on cryptotwitter and this one in particular had me laughing. I guess if there is one thing we can do when we are facing idiocy of this level is laugh from a distance, the key word here being distance.
I hesitate to give anyone financial advice, but on this one I think I'm not taking a risk: Don't play with fire, don't get caught hodling tether when the bottom falls out.
