Also a skeptic: this author doesn't know what they're talking about. "Turning on the printing presses" to defend the USDT/USD price? What? No, the opposite: Tether would have to be buying USDT with USD then destroying it.
There remains the possibility that Tether doesn't need to have the money in reserve (or not 100%, anyway). It can just conduct open-market operations to maintain parity: printing & selling Tether when USDT/USD is above parity, and buying & destroying Tether when it is below. This could even make for a very nice business model, as explained in this blog post:
https://kevinlawler.com/tether
Of course, the conclusion that Tether will stay solvent from profit motive does not concord with history: FDIC came around for a reason, and that reason was 30% of all banks started in the US ended in insolvency. Plus, there are obvious parallels with Black Wednesday:
https://en.wikipedia.org/wiki/Black_Wednesday
You can even short Tether on Kraken, although then you have to worry about counter-party risk through exchange insolvency.
There remains the possibility that Tether doesn't need to have the money in reserve (or not 100%, anyway). It can just conduct open-market operations to maintain parity: printing & selling Tether when USDT/USD is above parity, and buying & destroying Tether when it is below. This could even make for a very nice business model, as explained in this blog post:
https://kevinlawler.com/tether
Of course, the conclusion that Tether will stay solvent from profit motive does not concord with history: FDIC came around for a reason, and that reason was 30% of all banks started in the US ended in insolvency. Plus, there are obvious parallels with Black Wednesday:
https://en.wikipedia.org/wiki/Black_Wednesday
You can even short Tether on Kraken, although then you have to worry about counter-party risk through exchange insolvency.