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A comment on Crypto.com Will Delist Tether in Canada. Parent comment

Re:Crypto.com Will Delist Tether in Canada by eaurouge on Tuesday January 10, 2023 @09:48PM (#34334468)
Right. As I suggested in another comment, this belief is more of an article of faith than one based on actual facts.

But, my point to GP is that USDT redemption is offchain, and peg defense (for algorithmic stablecoins) or price discovery (for Tether) is onchain. So the market determines the onchain rate.

If it goes to 70c, for example, arbitrageurs will likely step in to pick up cheap USDT and take on the redemption risk. Of course if the market loses complete faith and no party is willing to take on the redemption risk (an unlikely scenario imo), the onchain rate could fall to zero.

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Re:Crypto.com Will Delist Tether in Canada by lmm on Wednesday January 11, 2023 @02:02AM (#34335877)
> If it goes to 70c, for example, arbitrageurs will likely step in to pick up cheap USDT and take on the redemption risk.

Only if Tether is visibly doing redemptions. If they freeze redemptions then you'd be dumb to pay 70c for their magic beans. So there's a tight linkage between the onchain price and redemptions.

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