You are completely missing my point…and they are now audited. That’s what I meant, before shooting them down let’s see how their quarterly audits go, they might act in good faith and get a license of some sort in the future.
They’re not audited, they’re providing quarterly updates themselves, but noone’s checking if they’re pulling these out of thin air
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I wouldn’t rely on this. For a bailout to happen it’s not enough to be big, it needs to have systemic implication on the real economy…and fall into the regulatory framework.
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So isn’t anyone owning these tokens providing Tether interest free financing for them to invest in… whatever they feel like. All of the risk and none of the return
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Right. Enron market cap usd 60 billion. No bail out
Yes which is why banks are highly regulated entities so as to avoid creating systemic risks. The company behind tether isn’t (and its deposits won’t benefit of having a lender of last resort and they risk getting a haircut during bad times).
Some people compared tether to money market fund which are partly responsible for the GFC. (They have been regulated more heavily since)
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Probably the fed wouldn’t mind too much a “reality check” for crypto, have people get a reminder of the benefits of financial regulation.
And yeah I don’t even see which mechanism they’d use to bail out an unlicensed non US entity.
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Why should I care about stablecoins anyway? They are used to solve some shortcomings of the centralized exchanges. A btc remains a btc.
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That is true, but it only starts taking real import if things are valued in BTC, and stay there. If Bitcoin becomes the currency of the future, I can see holding bitcoins for bitcoins sake. I’m less and less convinced that BTC will hold the test of time, though, and more and more that if cryptos hold as a kind of currency (which I believe they might), it’s another set of coins that’ll be the winners.
As I understand it, the 1 BTC = 1 BTC stance is an all or nothing posture. That’s a bit too risky for my own tastes.
Edit: it’s interesting that in his second lecture, Gary Gensler mentions that it took 15 to 20 years from their inception for credit cards to get regulated. He also seems to be pro crypto regulation (and is in a good position to get it done as chair of the SEC).
Regulation may not be there already but it’s very probably on its way.
Exerpt from the transcript:
“I go to conferences sometime and talk about Bitcoin regulation, and they say, well, why can’t the government solve this now? I sort of remind them that it took 15 to 20 years from the introduction of credit cards kind of in the early to mid 1950s and the real take-off in the 1960s-- it was 1974, 1970, '77, the three big credit laws. So if you’re going to be an entrepreneur in Bitcoin, know that it could be 15 years until there’s some cryptolaws in the future.”
Then again, we’re not living in the 1960s anymore.
Regulatory pace is certainly higher - though so might be complexity in crypto.
Just checked and the cash reserve requirements for US banks are… 0%.
Give tether a few quarters to see the evolution.
Also, because of that:
It is quite obvious that regulations are coming.
Many countries have 0% reserve requirements (reserve is not very relevant for solvency, but was used in the past for monetary policy purposes, it’s utility for policy change has been questioned more recently).
Capital requirements are what usually limits the creation of money by banks: Capital requirement - Wikipedia
In any case bitfinex claims (claimed?) it had 100% reserve and isn’t a bank to begin with. That seems far from the truth, and if it actually is a bank, it’s much riskier than proper banks (no safeguard or lender of last resort, and I doubt they’d meet the Basel III guidelines wrt capital requirements)
Notable difference is if you use a credit card money is being lent to you. Exact opposite of tether example where you loan USD in exchange for a token
I think what he meant was that the item and the ways it is used need to be understood, then go through the slowest and most immune to change process there is outside of the field of geology: democratic political lawmaking.
It was in 2018, though. With him as head of SEC and recent developments, regulatory rules are almost on the table already if you ask me. 2009 + 15 = 2024, after all, we are already there.
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The mooc platform EDX (that I highly recommend as a learning platform) also offers a couple of courses on blockchain held by different universities and also at least one on cryptocurrencies by Berkeley.
Some courses are completely free, others are partially free or free if you don’t want to have an official certificate.
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Wow, some of them look tasty! Bookmarked, thanks!
I recommend as well, cheap certifications and you have the opportunity to learn something off your specialization.
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Does anyone have an analysis from a financial expert or academic outlining why BTC is the future?
I get blockchain basic principles but not why BTC makes sense
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Well, for any currency to work, people need to have confidence in it. You could argue the greater fool theory also applies to gold, silver (which I don’t see the real value of either in modern times)
However Gold and silver has a long history going back 1000s of years because they look pretty and kings and queens used to covet them as symbols of status, we used to put gold all over churches etc. They have just always been there and if there was a war and a collapse of the economic system, well my mum understands what gold is
I just can’t see it with BTC, and am trying to open my mind to what I am missing