US Fed Official Calls Tether a ‘Challenge’ to Financial Stability

Re:US Fed Official Calls Tether a ‘Challenge’ to Financial S... by gruez on Saturday June 26, 2021 @11:41PM (#27648379)

> Because the ecosystem has been offerint 8-20% interest to hold USDT and put it in a savings account or defi contract.

1. do the defi contracts not accept other stablecoins? Does USDT have a disproportionately higher interest rate than more reputable stablecoins?

2. This situation (large amount of USD being parked in USDT, people warning that it's a fraud) has existed since the last run-up (2017-2018), before defi got popular. So while there might be people parking their money in USDT to earn absurdly high interest rates, I don't think that's the whole story. It'll also be interesting to see how much USDT is locked in defi contracts vs that's issued.

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Re:US Fed Official Calls Tether a ‘Challenge’ to Financial S... by graeme on Sunday June 27, 2021 @08:18AM (#27650980)

The first is a solid point. I’m not sure USDT has a higher interest rate than, say, USDC.

The second actually isn’t compelling though. If you have a fraud with, say, 10% daily interest in will unwind in months. But a fraud with 10-20% annual interest will take years. Madoff kept his scheme going 20+ years.

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