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The US Federal Reserve has no interest in holding a whole lot of random cryptocurrencies. Tether doesn't really work - letting you trade arbitrary cryptos into tethers means the backing company is holding arbitrary cryptos it hopes to resell for more tethers.

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Tether doesn't hold arbitrary crypto (except a small amount to pay transaction fees on the blockchain). They are just a window where you can exchange tether tokens on the blockchain for USD in a bank account. The exchange of tether tokens with other crypto is decentralized and handled by the participants.

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