The audits/attestations reveal this and Tether itself has confirmed it holds a large quantity of "commercial paper". They have steadily backed away from the claim that USDT is backed by dollars.
"Commercial paper" is a loan, an IOU --- not hard currency/assets.
You can't have your dollars and loan them to others too. If I give Donald Trump an unsecured loan for $1000, I can't "legally" claim to still hold the $1000 in cash.
The idea that an unsecured IOU is without risk and is worth just as much as dollars in hand is pure fantasy. Yet all the exchanges collectively peg USDT at $1.
"Commercial paper" is a loan, an IOU --- not hard currency/assets.
You can't have your dollars and loan them to others too. If I give Donald Trump an unsecured loan for $1000, I can't "legally" claim to still hold the $1000 in cash.
The idea that an unsecured IOU is without risk and is worth just as much as dollars in hand is pure fantasy. Yet all the exchanges collectively peg USDT at $1.
https://www.wsj.com/articles/tether-says-massive-reserves-he...