> Whenever a crypto company uses the word "liquidity" that's a red flag that it's likely some kind of a scam.
That’s really not the case. If you deal with investments on any real scale the utility of liquidity becomes very clear.
If for any reason I decide I need to move a large sum of money (let’s say 100k), and god forbid I need to do that internationally, you’re going to have to wait. (too bad if it’s the weekend) Meaning your cash isn’t as liquid as it could be.
Tether and other stable coins primarily make moving sums of money within minutes internationally possible. If I see an investment opportunity and want to act, waiting on a wire might be a no go.
The vast majority of Tether and stable coin use is for that. People holding tether as some kind of investment is practically nil (it’s a horrible horrible investment even if it’s backing was physical dollar bills in a vault)
The reason services like Nexo provide 12% interest is not to hold, it’s to facilitate trade and moving in and out. If I want to have cash available for trading, moving it as USD is very hard. Moving it as stable coin is simply and allows trading quickly. The 12% is a bonus/hedge so you don’t feel like you have to immediately convert your liquid positions (dealing with taxes etc). With the interest, one can keep some stable coin on hand for trading and minimize losses. With Nexo, people are also taking out collateral loans. If you take that as USD, then tour waiting on banks to use it. Take it as stable coin you can use it immediately. The 12% also offsets the loan interest so you don’t need to pay it back immediately.
So maybe tether’s strength as a stable coin can be scrutinized, it could be more arable with better backing… but again the concept isn’t a scam, and certainly nothing to do with pyramid schemes etc.
Most people who talk about tether as a scam (or other stable coins) have no experience in using it.
That’s really not the case. If you deal with investments on any real scale the utility of liquidity becomes very clear.
If for any reason I decide I need to move a large sum of money (let’s say 100k), and god forbid I need to do that internationally, you’re going to have to wait. (too bad if it’s the weekend) Meaning your cash isn’t as liquid as it could be.
Tether and other stable coins primarily make moving sums of money within minutes internationally possible. If I see an investment opportunity and want to act, waiting on a wire might be a no go.
The vast majority of Tether and stable coin use is for that. People holding tether as some kind of investment is practically nil (it’s a horrible horrible investment even if it’s backing was physical dollar bills in a vault)
The reason services like Nexo provide 12% interest is not to hold, it’s to facilitate trade and moving in and out. If I want to have cash available for trading, moving it as USD is very hard. Moving it as stable coin is simply and allows trading quickly. The 12% is a bonus/hedge so you don’t feel like you have to immediately convert your liquid positions (dealing with taxes etc). With the interest, one can keep some stable coin on hand for trading and minimize losses. With Nexo, people are also taking out collateral loans. If you take that as USD, then tour waiting on banks to use it. Take it as stable coin you can use it immediately. The 12% also offsets the loan interest so you don’t need to pay it back immediately.
So maybe tether’s strength as a stable coin can be scrutinized, it could be more arable with better backing… but again the concept isn’t a scam, and certainly nothing to do with pyramid schemes etc.
Most people who talk about tether as a scam (or other stable coins) have no experience in using it.