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big money needs the liquidity Bitfinex's USDT provides, and I'd bet all of the institutional crypto investors are converting USDT to bitcoin. This, rather than converting to USD, which would indeed test whether each $1 USDT is backed by $1 USD. If you accounted for all Bitfinex's crypto + FIAT assets, I have no doubt they could back the USDT system dollar for dollar especially in this bull market.
It's the same security as fractional reserve banking (which as of 2020 is currently 0% reserve banking). There COULD be a run on the banks, to turn your account balance into cash, but there never will be a run on the banks. There COULD be a run to convert USDT to USD, but it will never happen.
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but what would I know?
Last edited by Nich : 8th January 2021 at 14:57.
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