Pegged currencies are still based on trust. For a nation state with a bad record and no trust from international markets, a pegged currency is more useful than outright FIAT. Even if the peg breaks, they still have some reserves to at least partly pay back debts etc.
Tether is the worst of both worlds. It's centralized, not backed by anything. No even an institution, government or trust based system backing it. It's just a few exchanges and some people at the center. Tether also won't allow US citizens to us tUSD.
It really could collapse any minute now. But this would take require support to it being lifted also. Not sure when that's going to happen. There surely is a place for stablecoins in crypto. But so far less centralized and more trustless stable-coins are not nearly as liquid. Although they're rising fast. I'm not sure if tUSD collapsing would have a positive impact on BTC's price, but surely it'd be a boost of morale for real crypto.
Agreed. Tether could in theory destroy the entire crypto currency market. I mean, literally burn it all down..
I have yet to see a single shred of proof that they hold as much USD as they claim, and they can't even get an auditor to verify their books.
If Tether collapsed, it would wreak havoc on the BTC price. The prices would jump by thousands of percent as people try to liquidate their worthless "dollars" into BTC. Simply because there's no way to buy USD with tUSD. Arbitrage bots would stop working as networks get clogged up and people panic..
That panic in turn will inevitably crush the price of BTC.. It would be like March 2020 on steroids
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