Banks generally have full backing, verified by frequent auditing, it just may not be all cash or cash-like assets.
But then again, not all of bank’s liabilities are cash either. E.g.: CDs.
Things get hairy when their long-term assets go down in value and/or there’s a sudden demand for withdrawals triggering a mismatch between short-term liabilities and long-term assets.
We have strikingly little audits from this stablecoin. Do assets match liabilities or not? For a bank, they always will or else they get shutdown before losses become too great.
But then again, not all of bank’s liabilities are cash either. E.g.: CDs.
Things get hairy when their long-term assets go down in value and/or there’s a sudden demand for withdrawals triggering a mismatch between short-term liabilities and long-term assets.
We have strikingly little audits from this stablecoin. Do assets match liabilities or not? For a bank, they always will or else they get shutdown before losses become too great.