Tether liquidity crushes banks? S&P pours cold water, CEO angrily denounces "TradFi propaganda"

Question

[Coin World] Hayes&#39; warning that "Tether&#39;s gold and BTC can&#39;t hold up after dropping 30%" has recently prompted analyst Willy Woo to bring out AI for a showdown. He ran some data with Grok: 75%-80% of Tether&#39;s reserves are cash that can be moved immediately, while traditional banks? At most 10%-20%. Looking solely at on-book liquidity, this play with stablecoins is indeed more hardcore.However, AI is not one-sided—behind the banks stands the government, and their resilience is on an entirely different level. Even more explosive is that S&P directly rated Tether&#39;s pegging stability as "weak", citing high asset risk. Tether&#39;s CEO Paolo Ardoino fired back on the spot, calling it "propaganda of traditional finance".The points of contention are actually quite clear: strong liquidity but lack of sovereign backing vs weak liquidity but with state machinery to support it. Which side are you on?

AirdropGrandpa · Accepted Answer

It&#39;s all nonsense, no matter how strong Tether&#39;s liquidity is, it can&#39;t change the fact that people don&#39;t trust it.

When S&P says "weak," it&#39;s weak. Isn&#39;t this just TradFi trying to maintain its discourse power?

It doesn&#39;t matter if Ardoino is angry; without government backing, it&#39;s always a worry.

75-80% liquidity sounds impressive, but if something goes wrong, who will cover you? Banks have the central bank.

Neither of these two is a good thing, but stablecoins are indeed a bit more transparent than fiat... maybe.

Liquidity and credit are always in opposition, and crypto can never escape this fate.

I just want to know, if there really is a bank run, how long can that 80% cash last?

The word propaganda is used well; they&#39;re just passing the blame to each other.

It looks lively, but in reality, that&#39;s how centralized stablecoins are; there&#39;s nothing to brag about.

DevChive · Answer

75%-80% cash flow? I have to question this data... S&P&#39;s "weak" rating isn&#39;t without reason, and without government backing, this crucial flaw can&#39;t be filled by anyone.

BridgeJumper · Answer

The S&P rating is indeed a bit hurtful, but Paolo&#39;s rebuttal is not without reason... The notion that liquidity is crushing banks is a bit overstated; the key still depends on how long market confidence can hold up.