For the record, I think all this crypto currency stuff is plain dumb, and that tether is likely a fraud.
That said they don't state anything about what their reserve is. Wealthfront has a 2.3% savings account for us normal people. If I created a stable coin like tether is and had a billion dollars of investment; I could make 23 million dollars a year and tell people that I have a 1:1 backing without lying.
If I went to a bank with a billion dollars I could likely negotiate an even higher rate for such a savings account.
That said they don't state anything about what their reserve is. Wealthfront has a 2.3% savings account for us normal people. If I created a stable coin like tether is and had a billion dollars of investment; I could make 23 million dollars a year and tell people that I have a 1:1 backing without lying.
If I went to a bank with a billion dollars I could likely negotiate an even higher rate for such a savings account.