Tether and Circle | The Financial Heist Exposed
A growing unrest is bubbling in the financial world. Tether and Circle, both known for their stablecoins, face serious allegations of exploiting the FDIC's safety net. Concerns over unverified reserves and insufficient audits paint a grim picture for bank customers.
The Shadow Bank Dilemma
Tether and Circle sit on massive amounts of stablecoins: 152 billion USDT from Tether and 60.5 billion USDC from Circle, totaling around $212.5 billion. However, no official audits have been conducted to confirm their actual reserves. Skeptics argue, "If they actually had the cash, they would prove it." This raises eyebrows about their true financial standing.
"They create billions in USDT and USDC each day," a concerned source claimed, spotlighting the staggering daily transactions.
Unpacking the GENIUS Act
With the potential passage of the GENIUS Act, these shadow banks could gain an upper hand by accessing FDIC funds before regular customers, should insolvency occur. With FDIC insurance protecting deposits up to $250,000, this bill seems to prioritize profits for Tether and Circle while pushing risks onto everyday people.
The Stakes Are High
As Tether and Circle continue unchecked, financial experts warn that the ramifications of their potential insolvency could echo the 2008 crisis, where ordinary citizens bore the brunt of corporate failures. A recent commenter pointed out, "Banks create money from thin air every day", further fueling a sentiment that today's banking system may be repeating past mistakes.
Key Points to Consider
⚠️ Tether: 152 billion USDT circulating
⚠️ Circle: 60.5 billion USDC circulating
💰 Total: $212.5 billion in assets remain unverified
❓ "Why aren’t they audited?" - common concern among people
🔒 GENIUS Act could provide priority access to FDIC funds for unverified companies
The Climate of Uncertainty
With increasing scrutiny, experts assess a 70% chance for the GENIUS Act to become law. If this happens, Tether and Circle may face pressure to reveal their financial audits.
Should they fail to prove their reserves, we might see a rapid decline in customer confidence—estimated at a 60% chance of triggering mass withdrawals, akin to bank runs during previous crises.
Lessons from the Past
A historical comparison reminds us of the 1930s Dust Bowl, where misplaced trust in over-leveraged farms led to disaster. Tether and Circle appear to be wading into similar waters, dancing on a precarious precipice with billions at stake. If they don't take action, the fallout could mimic the devastating consequences seen in history.
As finance experts ponder the outcome, both the public and regulators must hold Tether and Circle accountable. Without transparency, we risk repeating mistakes that could send shockwaves throughout the financial system.