The existing financial paradigm is upset about the threat that cryptocurrency poses to the banking cartel, and recently converged to discuss how to handle it.
Names like Janet Yellen (Treasury Secretary) summoned Federal Reserve chairman Jerome Powell, Securities and Exchange Commission (SEC) head Gary Gensler, and others to meet to "avert a nuclear war" – meaning they want to protect their own fiat Ponzi scheme from being overtaken by crypto.
Fortunately for them, Tether is a questionable situation because its alleged stability may not be all that stable after all, especially if the money behind it does not actually exist.
"Tether is what's come to be known in financial circles as a stablecoin – stable because one Tether is supposed to be backed by one dollar," reported Bloomberg. "But it's actually more like a bank."
"The company that issues the currency, Tether Holdings Ltd., takes in dollars from people who want to trade crypto and credits their digital wallets with an equal amount of Tethers in return. Once they have Tethers, people can send them to cryptocurrency exchanges and use them to bet on the price of Bitcoin, Ether, or any of the thousands of other coins."
The idea behind this makes sense, but is the money actually there to back Tether? Nobody seems to know for sure because how it all works remains "a mystery," according to Bloomberg.
"... Tether Holdings doesn't have enough assets to maintain the 1-to-1 exchange rate, meaning its coin is essentially a fraud," the media outlet further reported.
"But in the crypto world, where joke coins with pictures of dogs can be worth billions of dollars and scammers periodically make fortunes with preposterous-sounding schemes, Tether seemed like just another curiosity."
There are currently 69 billion Tethers in circulation, and 48 billion of these were issued just in 2021.
"That means the company supposedly holds a corresponding $69 billion in real money to back the coins – an amount that would make it one of the 50 largest banks in the U.S., if it were a U.S. bank and not an unregulated offshore company," Bloomberg says.
Financial hack Jim Cramer of CNBC is already telling people to sell their cryptocurrency based on an anonymous blog post about Tether, entitled "The Bit Short: Inside Crypto's Doomsday Machine."
"If Tether collapsed, well then, it's going to gut the whole crypto ecosystem," Cramer ranted.
The size of Tether's alleged dollar holding is so large that even if they are real, Bloomberg considers the situation "dangerous."
"If enough traders asked for their dollars back at once, the company could have to liquidate its assets at a loss, setting off a run on the not-bank," the outlet reported.
"The losses could cascade into the regulated financial system by crashing credit markets. If the trolls are right, and Tether is a Ponzi scheme, it would be larger than Bernie Madoff's."
Puerto Rico banker John Betts says that Tether is not really a stablecoin at all, but rather "a high-risk offshore hedge fund."
"Even their own banking partners don't know the extent of their holdings, or if they exist," Betts stated.
On LinkedIn, only about a dozen employees are listed at Tether. This is a miniscule number for a company that supposedly has $69 billion under management.
There is much more to the Bloomberg investigation into Tether that you can read about at the Bloomberg website.
Check out Collapse.news to learn more about what appears to be an impending financial and economic collapse of global proportions.
Sources for this article include: