Squashing Tether
ฝัง
- เผยแพร่เมื่อ 4 พ.ย. 2021
- Federal regulators requested more power from Congress to regulate stablecoins, a fast-growing type of cryptocurrency that they warn could result in bank runs and consumer abuse unless lawmakers act quickly, according to a report issued Monday by the Treasury Department.
The report, which was undertaken by the President’s Working Group on Financial Markets, called on Congress to pass a law that makes issuers of stablecoins subject to requirements like those of traditional banks and financial institutions. Such a change would require that those institutions hold adequate reserves to ensure they can meet the demands of customers to cash out quickly.
The call for congressional action comes at a pivotal moment, as cryptocurrencies are exploding in growth with limited federal oversight in place to regulate them.
Stablecoins, have not always proved as securely backed as companies claim, which the Treasury report warns could pose significant problems for customers, investors and the overall financial system.
Some regulatory powers already exist, the report said, including the ability of the Securities and Exchange Commission and other federal agencies to police certain stablecoin issuers.
But after months of studying the growing risks presented by stablecoins, the leaders of the President’s Working Group on Financial Markets said they had identified regulatory gaps that legislators must address, essentially throwing the issue to Congress.
Here is a link to the report: home.treasury.gov/system/file...
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No idea Tether was so unregulated...really shakes up my faith in crypto
If you haven't seen the Procter & Gamble video on The Conservative Treehouse blog you really should. Scary stuff....
@@jmanakajosh9354 Of course it's unregulated. It's akin to a company in Cayman Island printing a banknote that says "this note is fully redeemable to 1 US dollar", and crypto exchanges are accepting that banknote as equivalent to 1 US dollar when someone uses it to buy other cryptos.
Patrick Boyle, Who do think you are soliciting ON What's App are you Serious ? Are You Underestimating Me? I DON'T Relate or have Anything to do on Such A Site what A Laugh is that your caliber to play silly games or are you kidding? Is Someone Mocking You?
But after all, it was officially confirmed that it is backed up by about 80% and the regulation will come soon ... but whether it will be good for crypto is another question
Tether, "a company that seems to be quilted out of red flags".
Priceless comment
Wow he just described my girlfriend
Yeah, more red flags than a communist parade
As someone that is heavily in crypto, Tether is the biggest scam in the market. Am I afraid for it to fail and crash the markets? No... This is because I feel that governments are now in on the scam that will prevent if from failing. They have gone to court and managed to come out clean which is the biggest WTF moment.
@@jlhumor1565 well they paid a big fine and cant do business in NY legally. There aren't any laws that can punish them.
Tether is a huge scam. And still, no one seems to care. I saw that most of the time when bitcoin jumped it was when tether poured a lot of liquidity onto the market, essentially doing a quantitative easing by buying a ton of bitcoin with money created out of thin air. When all those people want to get out by selling their tethers for real fiat dollars there's gonna be panic in the disco :)
Love the image of Logan Paul as you talk about scams within the space.
Editor had a bit of fun there
9:36 And the text "middle class American" below his image lest his lawyers sue for defamation. He certainly wasn't calling Logan a scammer.
@@isoaxe It would not be defamation because he literally is a scammer.
Logan Paul fans deserves to be rug pulled
Crypto-Bender: "Yeah well... I'm gonna build my own bank. With no regulations and with massive printing! In fact, forget the bank!"
This is gold. Elite reference
That's what the bank is doing though
@@maackiaamurensis5703 which bank?
@@benchoflemons398 wooosh
@@JoelChenFa The federal bank.
Tether is only collateralized with
Tether : *Brrrrrrrr.......*
That
@@Mr_Hassell They can not find an accountant they said.
Don’t worry, Benny has the safe hidden behind a painting in the Tether HQ..no one is going to get it
Where do these numbers come from? Is there actual verified data on this?
Awesome Patrick! You are a slither of sanity amongst all this pumped up speculative space
Slither lol
What would we do without him?
I hope you continue to do more Crypto videos. There's a drought of informed commentary on the crypto space. On the one hand we have a lot of dumb money in crypto, people who happened to get rich by good fortune, and think that qualifies them to give financial advice, having ""laser eyes"" and apparently thinking that a bubble can just grow forever. On the other hand, we have an aging population of regulators who really do not even understand the first thing about cryptocurrencies (which I find less forgiveable because it is their job to understand).
This is a scammer^
There may be more bots that comment. Stay safe.
There's not much to know about crypto.
@@miguelberetta7887 Someone removed my long reply that I made. Maybe becaues I mentioned a certain bad thing that happened in China some decades ago. The short of it is that you're wrong. A lot of mathematical, computer science and regulatory expertise goes into designing these distributed systems which can enable greater market efficiency and new functionality not present in existing financial services.
@@myridium You don't need to know how to create it to understand that it's decentralized in the sense of replacing the banks with miners, more expensive and slower transactions, and heavily manipulated, i.e bitcoin spikes and tether.
Patrick is one of the few TH-camrs who's creating meaningful videos on this topic. However, your take on the regulators make no sense to me. When you pay close attention to Gary Gensler, you learn that he's a well informed person. The current crypo industry is rather a wild west casino, given the amount of incidents. They have a long way to go till being regulated, but it will be necessary before the big players chime in.
Thank you Patrick. You’re such an important pundit. Very well educated, and able to communicate your wealth of knowledge explicitly and clearly at a level that a viewer at any level of knowledge can understand. Good video.
Just picked up your books Patrick! You're entertaining and you've taught me a lot just from the videos, thanks!
Something to note is that if these coins were regulated, especially under banking regulations, they lose a lot of their appeal to potential holders. In my experience, a lot of crypto enthusiasts get into crypto because they distrust banks and government, and if you regulate stablecoins under banking regulations, there's not much that distinguishes them from traditional banks and as such those crypto enthusiasts will no longer have any reason to stay invested in stablecoins.
Yep, pretty much
people get into crypto in the hopes to get rich. they don't give two shits about banks
there's many advantages of crypto currencies. they're quicker to transact, can be much more transparent and cheaper to use. automated. it really depends on the crypto and its purpose.
@@svansyLol, the only reason why it is cheaper and faster is because it is unregulated. For banks, there are a ton of regulations that slow all transactions.
"I dont trust banks at all."
"That's pretty reasonable given everything."
"You know who I do trust? A bunch of tech bros and Matt Damon. They have all my money now."
Sometimes I am wishing that Patrick will run on empty and do a food review.
Mukbang crossover incoming
Crypto might sit on the biggest Scam ever. Stablecoins. The rugpull will be epic...
Tether is like the FED, they basically just print their own money lmao
Not surprising that a service replicating banking would be seen by regulators as needing to be regulated in the same manner as banking. Opaque fractional reserve banking (with no specific fraction required) is probably not good for depositors. Can certainly imagine high chance of fraud in this space.
We'll just start using decentralized stable coins. The entire purpose of this is to ignore the government. Only morons are using centralized stable coins as it is.
@Elizabeth Moore The point is that Tether shouldn't have the ability to do that. It's centralized garbage.
@Elizabeth Moore everyone has an agenda. Patrick Is an incredibly talented Person, however he stands with that small part of the population (richest) that would be "harmed" by crypto adoption.
@@davidezonta all evidence suggests that the richest are the people who benefit the most from crypto. They exploit the middle class investors by selling them BS coins + NFTs. This is well understood. People with the most capital to put in have the most to gain from investment opertunities
@@davidezonta Honestly wealthy people will be fine one way or another. Given enough time they will be the ones in control. Old money works that way
It's always worth it to watch your videos. I learn new things every time. Thank you for the wonderful content.
1929 should have taught all of us about how unsustainable banks are without regulations. Do we really need a 21st century Great Depression to learn this again?
And yet many progressives favor "breaking up the banks" as if smaller banks were a good thing and not a factor of instability.
There is no learning our lesson humans as a whole aren’t capable of this, the only thing that will end this cycle of repeating history is extinction of humans
Thanks for clearing all that up, Pat. Really insightful video as always.
I see a hornets nest, I kick it, too.
Pretty much. Any regulation of stable coins will just push people to purely decentralized stable coins. Ignore the government, because they can't stop it.
@@James-vj5hz I'm going to disagree with you on the regulation piece, but you do you man.
Thanks for another great video! I know nothing of stablecoins, so after watching your video I saw Coffeezilla's expose of Tether, and... Whoa. Those guys would definitely not get to run a bank. It must be nice to pay your company's debts by having your other company print money out of thin air and give it to you. Evergrande would probably love to have that option right now.
This was great and informative. There’s a serious lack of quality information like this on TH-cam in regards to crypto currency. I hope to see more videos like this one.
Love how all this "red tape" they are trying to avoid amounts to just verifying that they aren't lying about being a stable coin. Wonder why they are so against it...
ROFL: I did not realise this was a comedy channel "Regulators want to protect middle class investors" LOLOLOLOL!
Had that been the case, they would have done something about the Hedgies Piracy.
I really like your channel
Awesome content
And the way you speak and act is calming
Thanks for making these videos
Excellent report. Thanks Patrick
This video is a Godsend! Thank you for your service! 👌
Thanks for the content Patrick! Keep it coming!
Great video! Thank you Patrick. I learn a lot from your content.
Patrick- would love to hear your thoughts on implications of regs like these dropping quickly... I presume 'velocity of money' and 'multiplier effect' could lead to a huge drop in crypto valuations, it'd be like the oxygen leaving the room... a video on the possible market dynamic and theories would be really interesting and a helpful warning! (if my concerns are founded) ... More great content, thank you.
that's Their goal
Agreed. I'd like an understanding of the time frame, could these pass as soon as Xmas 2021? Or would they take several months or years (regulators are notoriously slow, perhaps due to taking care or perhaps simply bureaucratic red tape)
For now the effect of regulation seems to be limited, as shown by china's ban on cryptocurrency. Crypto seems to provide lots of benefits to even the poor countries. Getting access to finance (lending, saving, borrowing, etc) without needing to build banking structure is quite convenient. It looks like the places without access to banking is going to enthusiastically adopt cryptocurrency.
Ready to buy the dip
Long term all these dinosaurs in the banking industry will either adapt to the space or lose their purpose and decay
“Let go your earthly tether.
Enter the void.
Empty and become wind.
Empty. And become wind.”
"Tether will pay $41 million to settle allegations it lied in claiming its digital tokens were fully backed by fiat currencies"
Suspicions about this were floating around for more than 2 years now. The lack of audits raised suspicions that Tether was woefully underfunded. I think it was discovered that they only had just under 3% of their assets backed by securities.
Yeah, if they were above board then they would relish the opportunity to prove that in court, increasing public confidence in their stablecoin. Well they might not 'relish' it, but at the very least they would go that route. Paying to settle on this matter is a big red flag.
it's very weird to hear about settlements between accused and the accuser when the accuser is basically government and the accusation is financial fraud towards citizens
They could have said "fully backed by highly liquid bonds" and actually have done so enabling them to sit back and enjoy the arbitrage.
@@alexmikhylov Yeah. This is really weird. But I believe this is because these departments of the governments are severely underfunded almost deliberately so they don't have the staff and power to legally pursue huge and heavily funded offenders, to many of these offenders such "small" fines are factored in as costs of doing business since they are lower than the potential profits to be gained by breaking laws.
In Norway for instance, the Consumer Council has the power to shut down any company for violations of Norwegian consumer laws no matter how large it is, it is also heavily funded and staffed by the best talent. And is independent of any political party or corporate influence, working for the public good.
Awesome! Finally a video about tether.. enjoyed your views Patrick!
Patrick I listen to your videos to learn but also to fall asleep. Your voice is hypnotic.
Thanks for another video, Patrick
I thoroughly enjoy watching your videos!
Thanks!
This channel remains the only youtube channel that will not notify me of new videos coming up! The alert always on doesn't work for Patrick Boyle!
I for sure agree with this stance. Without that level of strictness there will be "random" market crashes due to liquidity problems; stablecoins need to be 1:1 no fractional reserves
Awesome video full of valuable info! Never disappointed on this channel
Excellent content as always Patrick.
This is like asking the south american cartels to pay taxes “like other transportation companies”
Very nice and informative. Thank you
Boyle’s trolling via cutaways (Bavarian Lothario is my favourite) is just… **chef’s kiss**
Hit like button before commercial over. You always provide amazing value! Thank you for everything.
Never understood how anyone would trust Tether when they say they are fully backed. And maybe few actually do. Everyone just use it as a standard and hope they will be the last one out before disaster happens. I am really up and down on crypto in general. I like them as someone who studied distributed systems and like what they explore in terms of distributed consensus. But I am really skeptical to a lot of the space. And most stable coins especially. They are NOT how financial innovation should be done.
The people behind Tether literally admitted that only a small fraction of their token are actually backed, so this isn't a matter of trusting them or not they said this out loud.
@@systemx6603 sure, only after being exposed that their previous claim was false.
How would the system collapse without outside intervention like outlawing crypto?
@@crosswire7777 This definitely does not need any outside intervention. At any point when more people ask for their money back than are putting money in, a normal bank run that is. This is how all banking works, however normal banks are required to have a certain amount backed as safety margin. I would not be suprised if Tether is playing veeeery dangerous with the margins they have backed, meaning that as soon as it starts going bad it will go very baaad. This is just my hypothesis though, taken from the previous actions of the people running Tether and how they have acted when people wanted to see how their buisness actually works.
Outside intervention would only interfere insofar that it might kickstart the movement of people out of the system, creating the start of the snowball and then it keeps rolling downhill from there.
@@Olodus thats not really a hypothesis, it sounds more like a gut feeling to me. You basically said if everyone sells at the same time it goes to 0. Thanks captain obvious
I do think this would set a good precedent for crypto: if X is regulated in a particular way, a token guaranteed to match 1:1 with X is regulated the same way (any fixed ratio works). Imagine a token that promises to be backed by shares of a particular stock. We should require the same level of regulation in trading that token as we would with trading that stock. For example, you shouldn't be able to avoid insider trading laws by trading the token instead of the stock. It is hard to imagine any other set of rules working.
There's a concept in patent law: If X is not patent worthy, X on the Internet a computer is not patent worthy. Similarly I think we'll end up with: If X is not legal, doing X but with a token in between is not legal.
If you can't hold USD on behalf of someone without a banking charter, you can't hold a token representing exactly 1 USD on behalf of someone without a banking charter.
Ah yes ram that regulation harder daddy!
@@Nekrumorfiini1 I feel like most of the problems I see are due to lack of proper regulations or lack of enforcement. De-regulation only helps the already rich and powerful. Oh well, back to my soul crushing corporate job...
@@Nekrumorfiini1 Yes
That is an Equity token or Security token and are already heavily regulated by the SEC. The terms you should search for are STO and ETO. STO's are still loosely regulated in the EU. Do your homework, this is old stuff.
How unfortunate regulation attempts to damper contemporary YOLO attitudes towards investing.
Perhaps YOLO attitudes are what brought about a lot of regulation.
"at one point it had access to no bank accounts anywhere in the world" 🤯🤣
Very interesting, thanks for the analysis
Content game on 100 Mr Boyle!!!
Gold and silver…get it while you can…this lunacy 🤯 can not go on forever 💰🧐
Mark Felton and Patrick Boyle are the best TH-cam content creators out there.
Love the video. Keep up the work
"Regulators want to step in most likely to protect middle class americans."
Picture of Logan Paul: "Middle Class American"
LuL. This channel just doesn't miss.
Another great and informative video, thank you for your content mr. Boyle. What is described here is , to my interpretation, a way for the system to incorporate cryptos and fit them in as some form of financial "tool" . It all boils down to having a way to convert the crypto to dollars (or any other currently circulating currency). And this in my humble opinion is cryptos biggest issue and why as it stands I still consider it a bubble ready to burst: Wether thourgh actions like the one described in the video or the simple act of trading cryptos, the goal is to accumulate more "dollars" and not more "cryptos". Until the -whatever necessary- change happens where crypto will be used for acquiring goods and services directly in a wide enough scale, it's just another toy to gamble on and poised to fail as an actual transactional currency.
I wonder how decentralized stablecoins, like DAI, fit into their regulation plans... they going to require everyone who owns a governance token to become a bank?
This is just an attack from the corrupt legacy banking industry that doesn't like the idea of their corruption coming to an end.
@@k0zzu21 From what I can tell.. the ones who are most afraid of crypto are the fed and the government.. cause that's where crypto is taking power from... the banks are just as concerned about a CBDC (central bank digital currency) as we are.. it takes all their power away.. so they are actually pivoting into crypto as well and have the means to do so.
@@BadbitStudios the fed is owned by the primary dealer banks. Those will be the ones distributing the cbdc.
stable relative to what? If it's stable relative to a fiat, then there's potential to run fractional reserve banking on that fiat with the stablecoin. It would be same as a commercial bank issuing bank notes during the gold standard.
I honestly don't even understand the enforcement mechanism of these regulations for decentralized stable coins. But I don't think they actually care, they just want to ward off big investors from the space and keep it underground.
Reminds me of the transition of Las Vegas from mob to corporate control.
SEC looking out for the middle class. . LoL
Thanks Patrick for this. Whats going on with Tether was the reason why i turned away from Crypto earlier this year.
Have fun staying poor
Tether: Paolo's magical printing machine.
I don’t know if all stable coins need to be regulated but I know for sure that tether needs to be taken with extreme caution.
Nobody believes that tether can back up all their coins. If you use their coins, you’re playing with fire.
Stable coins by their nature needs to be extremely boring and stable. Tether is playing fast and loose with their reserves.
They don't even have real reserves. They mint this garbage just to F with other cryptos. They presently have a phony method of USD like poker chip to buy up any crypto they want. These cryptos are now easily selling on Coinbase BitTrex Kracken etc. for real USD or Euros.
I mean... it's like a money printer.
Love the photos. Says everything.
We have been waiting for this
You are super good at explaining
Great video. Sometimes, when I deal with talk about crypto regulation I wonder how much has changed in banking regulation since 2007
Thank you for the valuable content. Would love to see you covering more Crypto topics.
Great video as always! :)
9:36 Patrick's impression of the middle class
😂
"Quilted out of red flags" lol
Love your down to earth view on cryptocurrency
Mr. Boyle on the Joe Rogan podcast would be the recipe for great conversation. Thank you for your videos!
I love that description; quilted out of red flags.
Stable coins are the only ones that should be regulated precisely because of what they intend to accomplish.
Push up the price of crypto so the owners can make money and nothing else?
@@sugarfrosted2005 reeeeach
@@spontaneousbootay
stable coins can decides not to follow the regulatory standards
I see that as an option cause tether is not based either in the US or EU
and Tether already violates US sanctions and tether is not a US based company to comply with US regulations
so I don't rly see tether complying in the future cause they are not even doing it rn
but on the other hand other stables coins out there like USDC might comply if regulatory standards come
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Just waiting for the tether scam to tank the bitcoin price...
So many more questions to ask.
But Big Brother is watching.
great video as always!!
🥤Pepsi & chilli🐕
I must be old school. This whole thing sounds like subprime mortgages redux.
This was a pretty good video. One idea that I can think of that stable coins could do if they were regulated like banks is to insulate crypto transactions directly to either banks or the dollar...in a sense they would serve as a clearing house where the stable coin would serve as an intermediary trading token until it was traded for actual dollars with a bank or similar financial institution. it would kind of work like gold during the gold standard era where gold backed most of the top world currencies. Instead of gold or the US dollar being the intermediary reserve tool for fx...a stable coin (most likely tether) would be the intermediary between the dollar, and maybe others can be specifically created for other world currencies. just an idea
Love your videos Patrick, but it'd be great if there was a mention of synthetic stable coins such as DAI, or other stable coin like instruments that are not pegged to the USD. As a industry wide transition to trading pairs made up of these alternative stable coin assets is far more likely than banking regulation being comply'd with. This is in part because other stable coin projects, such as DAI and others, do not have the same transparency issues as seen with tether, as most maintain their balances in on chain indepdently verifiable deposits, thereby representing significantly less risk to consumers.
It's also worth mentioning that interoperability & common trading pairs of a given asset is behind the uptake of a given stable coin, alongside the red tape issues you mentioned.
Yeah I worry that any regulations will lump all stable coins together under "crypto assets designed to follow the price of fiat currencies", because a synthetic stable coin would lack a coherent notion of deposits and in many cases may not even have a proper legal entity managing it
Good man Patsie Boyle!
Yeah well laws are subject to jurisdiction.
So....I will just Tether overseas.
I'm gonna buy more tether now
Some say Stable coins print as many coins as they wish , unbacked by the dollar, and use it to buy Bitcoin in order to keep the price up. How else can the miners pay the hefty electricity bills
I don't see Tether "crashing" any time soon. As long as its reserves work....
They crashed ages before you wrote that
Oh and I have to add the obligatory scam messages since it's crypto content. I always wonder how to make money from crypto because I'm a moron.
Oh you should talk to my man friday Prince Arthur of Aragon, he has made me so much money and I didn't have to do anything!
Really? That sounds amazing, how do I get in touch with Prince Arthur?
That sounds incredible! I will hand over my life savings pronto.
I almost thought this was real scam content 😅
I am so happy I invested with PRINCE Arthur of Aragon. He will handle your Bitcoin holdings. Message now, please do the needful.
Good stuff man
And tether is still stable and the most popular, nothing has changed.
They depegged a year ago and got charged with fraud this month. What the frick you on about?
I guess hiding overseas won't protect tether if they won't be able to be hosted on any of the big exchanges.
3:15 I was like "no no no-ner?"
Thank you very much
Pls do more videos on cryoto pls
Did Patrick just use “standards” and “banks” in the same sentence? Whaaat
Bring more Crypto news 😎👍🏼🍻🍺
Tether is ready for regulation, there are no problems with this.
Since I found your channel. I have found my financial world becomes darker and darker. Wth Jason statham?
Wha'd he say? I was concentrating on the weave and sheen of his jacket.
Nothing concerns regulators like some good old rapid growth, it has to be stopped!
*Trillions of dollars of fraud, laundering, and blood money in the traditional economy
SEC: i sleep
*$41 million dollars of questionably backed loans in a economy that "if it crashes wouldn't have an effect on the greater economy"
SEC: real shit???
Anyway grand video Patrick 😂
Wow! Great content, I want more crypto space valuations and criticisms please.
What's your opinion on the Luna-Terra algorithmic stablecoin?
Always pleased to see that Patrick loathes Logan and Paul(?) Paul as much as I do
Foundry for Crypto will save the day...
Oh look a fellow palantard
love the photos of "middle class americans"