Do you have a source for them only keeping "some" at hand? You brought up PayPal, which holds 100% of users crypto through an intermediary (Paxos).
> "When you add money to your Novi account, we convert it to USDP (Pax Dollar), a stable digital currency issued by Paxos Trust Company, a regulated financial institution. USDP is designed to have a stable value relative to the US dollar. So on Novi, 1 USDP is equal to 1 US dollar."
To me that implies it's done on chain...I guess it could just be in their centralized database though.
Curious what the Whatsapp UI does for moments when USPD hits $0.99 like December 1 2021 when it hit $0.989.
Source: https://www.novi.com/WhatsApp
Multiple US regulators came to the same conclusion. One regulator said “well you usually create tethers 1:1 in response to deposits the vast majority of times and vast majority of amounts, but for the brief few times you didnt at least put a disclaimer up, also here is a fine for not having the disclaimer up”
USDT? Up and up, it has not once significantly went down [1]. Do people truly believe that they are pegged to treasury and money flows to Bitfinex (despite knowing it is BS) and that they've never been in a significant out-flow period? (Edit: There is one I notice in October 2018 of also nearly 50% from $2.8B, much later than the actual 2017-18 crash. Doesn't take away from the peculiarity of the rest of the chart, but gotta point it out in fairness.)
Anyone with significant money in crypto should be terrified by these sketchy money printers (the irony) rather than complacent of. If and when something like Tether blows up, these are dozens of billions in liquidity that will go poof over night.
[0]: https://coinmarketcap.com/currencies/paxos-standard/ (click market cap)
The same standard would apply to Bitfinex. Only explicit tether redemptions for fiat at the issuer cause tethers do be destroyed. People just sitting in database-fiat on the exchange during a risk-off moment wouldnt cause tether redemptions.
If a more respected exchange like say TD Ameritrade issued a stablecoin upon every deposit, it would go up and up and up too, even in market crashes, as people use their investing accounts as value storage even in market crashes, anticipating to buy dips or wait for other market conditions.
Frankly I am baffled it is still going, I think it has to do with it being the first, but can't understand it hasn't fallen apart since or been taken over by better designed stable coins. People called Bitcoin fairy dust, but at least its supply is determined by its protocol and its price by a market - poorly regulated as it may be. Tether is proper fairy dust, holding together thru sheer wishful thinking of this tacit agreement that it is worth $1 a pop.
This as quite often been in whole round billions in the middle of the night on a weekend ...
> people in the east actually deposit fiat into bitfinex
In non-convertible RMB?
I appreciate that the demand for a way round currency controls is a big driver for cryptocurrency, but I'm still not clear how that sustainably functions.
Are those country’s financial networks so primitive that a transaction message cant be sent on a weekend like in antiquated networks?
There is also other fiat than mainland RMB