A Contrarian Look At Tether

Tether is the largest depositary stablecoin.Years of valid criticism, court settlements and fines cast doubt over Tether's secretive reporting and operating standards.This author proposes that outside of an excessive regulatory action, Tether's undeniable utility and its market dominance insulates it from bank runs.Digital tokens conjured by a child actor from the The Mighty Ducks, run by an ex-plastic surgeon from Italy, banked in the Bahamas by a bank owned by a co-creator of Inspector Gadget.Tether (USDT-USD), one of the most gratifying subjects of financial journalism, has been blessed by many good lines like this, written by FT, Bloomberg and many other reporters on a quest to untangle its bizarre past.The central question of all these articles: Why has there not been a bank run yet? How do people send hundreds of millions of dollars every day to the Inspector Gadget banker to mint Tethers to trade without knowing where their dollars go? Why have they not, on so many occasions of doubt (from court cases to fines by CFTC, all regarding Tether’s reserves) rushed to redeem their dollars all at once?Bizarre as it is, Tether continues to stand. Not even the dramatic demise of Terra-Luna (LUNC-USD) (LUNA-USD) at the moment of peak distrust in any token-representing-real-money, could bring Tether down.Tether as you will know is a depositary stablecoin, meaning it guarantees that for every $1 of Tether, it holds a $1 somewhere in...