What is the value of holding USDT over USD? Is it that some places that have other coins won't hold USD but will hold USDT?
This means you can easily create an exchange dealing strictly with crypto if you don't support USD.
Holding USDT is kind of holding USD. You just have Tether in the middle.
Main utility (value?) of stablecoins is to “bridge” USD fiat into crypto though.
Interestingly, crypto.com (exchange) keeps a “USD” balance for its customers, which is separate from its USDT balance. You can deposit/withdraw to/from your “USD” balance via fiat (bank transfer) or a basket of stablecoins like USDC, BUSD etc. Binance does this as well, and FTX before. They all kept USDT separate though. Worth considering why this is the case.
They’re regulated by the USA and I’m sure the terms say they’ll comply with requests from Uncle Sam.
To be clear, the theory is Uncle Sam has no power over Tether's U.S. dollars?
Because they’re not dollars, it’s a token that is supposed to be pegged to a dollar. It’s not a dollar until you redeem it for an actual dollar. In that respect it’s the same as USDC.
* You don't need multiple bank accounts in multiple countries with multiple banks requiring multiple onboarding, KYC and ongoing fees and management.
* It's faster and cheaper to move around than USD via banks (and near zero chance of a transfer failing because of KYC etc).
* All payments are (short of government action) final, you can be confident you have actually been irrevocably paid if you get tether. Your bank may reverse a transfer at will...
* It's actually more versatile within Crypto as many places in crypto prefer not to use USD itself.
* You can hold and transfer tether with basically no access to USD itself, the global financial system etc. So if you live in a place with very tight controls on capital (eg China or Zimbabwe). (I personally think this is a very under appreciated property of crypto for those of us in free, stable currencied nations)
* It's much harder to trace you as the owner (if used correctly, big if).
Or so I hear, not up to date on the latest in the crypto world.
Your bank signaled its willingness to move money to an other bank, who is in turn trusting enough of your bank to preemptively display that money as "received" while the actual settlement will happen the next day.
Modern, traditional, banking and brokerage is not based on actual fund transfer, but on the layering of trust relationships and complicated settlement state machines to give the impression of instantaneous transfers.
All operations done on money "just received" is done on margin, though at 0 cost.
In Australia our RTGS is called RITS (Reserve Bank Information and Transfer System) and settlement is generally instant[1]. It's relatively new (2018) but it is pretty amazing.
Even before this our system wasn't too slow - I can barely remember but I think transactions were mostly always settled in a single business day. When I lived in the US (2013-2015) I was really surprised by how painful and slow it was to do a lot of basic banking stuff.
1. https://www.rba.gov.au/publications/bulletin/2018/sep/the-ne...
https://www.frbservices.org/news/fed360/issues/100322/fednow...
I can't count how many times I've had to explain to people that domestic wire transfers are actually really, really fast. Even international wire transfers occur relatively quickly in my experience, though obviously I can't vouch for every country:country combination.
I get the impression that a lot of Tether/crypto proponents have never actually dealt with normal banking at scale, they've only heard about it through exaggerated depictions designed to make crypto look like the better option.
Don't get me wrong: There are a lot of areas where normal banking is imperfect and can improve! However, replacing it with an unregulated asset operated by a shady company that has been proven to have been lying about their reserves once already is not an improvement.
Also, you don't need Tether specifically to transfer crypto around quickly. Most people would just transfer their crypto directly. It wouldn't make any sense to convert your Bitcoin to Tether to transfer to another exchange just to convert it back to Bitcoin and pay exchange fees on both ends.