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Comment by vkou | Hacker News Reader

How is not having to deal with fiat currency an advantage for traders?

They still need to do cost-basis accounting for taxes, and this just shifts their risk of <exchange I use stealing all my USD and the police will never get it back> to <USDT will pop and collapse into worthlessness>.

I understand how this benefits exchanges (Because they can claim they don't need to follow KYC), but how does it benefit their users?

They'll also eventually need to convert USDT into USD - which they can withdraw. If you have an exchange that you can withdraw USD from, why are you even keeping your balance in USDT? Just trade on that exchange...

It's like if the NYSE only allowed you to cash out in scrip. I understand how this benefits them, but how does it benefit me?

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It's still slow and tedious to move USD between exchanges, and likely raises a lot of flags with your bank.

Being able to move USD between banks as fast and frictionlessly as you can move crypto makes it easier to take advantage of price differences on different exchanges. The tethers themselves are also tradeable with people who may or may not pay taxes or trade on KYC-compliant exchanges.

> It's like if the NYSE only allowed you to cash out in scrip. I understand how this benefits them, but how does it benefit me?

It doesn't benefit you, as you're left holding a bag of useless scrip if there's a big crash.

Which is precisely why tether is such a cause for concern. Well, except for crypto fanatics that call anything perceived as negative as baseless FUD.

Token transfers are much faster than wires/ACH and have less regulatory overhead. It benefits you to sell your bitcoins for USDT on one exchange and send the tether to another one. This is much faster and cheaper than selling for real USD and wiring the money to the second exchange.

Or hypothetically you could pay for stuff that's priced in dollars without the friction and fees of the traditional banking system. I don't think anybody actually does that though.

It's a way of combine the advantages of cryptocurrency - speed, fees, lack of regulation - with the stability of fiat currencies.

Not very stable if the issuer is insolvent though.

> Token transfers are much faster than wires/ACH and have less regulatory overhead. It benefits you to sell your bitcoins for USDT on one exchange and send the tether to another one. This is much faster and cheaper than selling for real USD and wiring the money to the second exchange.

Why wire money from one exchange to another? Is it to trade instruments that are available on one but not the other? Is it because your exchange does not have fiat withdrawals? Is it to take advantage of pricing arbitrage, because one of the two exchanges does not allow fiat withdrawals (How will you cash out, then, without paying a premium, that will eat your arbitrage?)

If so, why not just wire the bitcoins? Or Eth, or litecoin, or whatever? Why introduce conversion to USD or USDT as an intermediate step?

Tether seems to be solving a non-problem - or at least, it's not solving it in a way where its alleged USD peg provides any value. Use litecoin, or bch, or dogecoin, or whatever.

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