Great study by bitmex reserch team
https://blog.bitmex.com/tether/Financial data from Puerto Rico
Rumors have been circulating that Tether may have some link to the unincorporated American territory of Puerto Rico. We decided to analyse public financial data to look for signs of unusual activity or strong growth.
We noticed strong growth in the cash balance (and the deposit balance) in the International Financial Entities (IFE) banking category. This sharp increase in cash reserves could be related to Tether. It is also possible for this growth to be related to a non-Tether aspect of the crypto currency ecosystem — for example, plans to make Puerto Rico a crypto utopia.
The chart below compares the value of Tether issued versus the deposit balance for the IFE banking category in Puerto Rico. The match is far from perfect and we cannot draw any strong conclusion from the data. It will be interesting to see what figures the regulators in the region produce going forwards.
This kind of balance-sheet structure is unusual. Normally, banks lend most of their assets and only keep a small balance as cash. The table below shows a simplified typical structure of bank balance sheets.
Full-reserve banking results in a different balance sheet, which should be detectable by financial analysts even when looking at macroeconomic data. As of the end of September 2017, the ratio of cash to total assets for this category of financial institution in Puerto Rico rapidly climbed to over 70%. This may indicate the presence of full-reserve banking in the territory and that the practice is growing.
