Deltec Deputy CEO says that Tether is fully backed by US dollars and that this “is not a secret” so let’s read more in today’s Tether news.
The Deltec Deputy CEO Gregory Pepin stated that Tether’s reserve is actually fully backed and more than what is in circulation” saying that neither Tether of Bitfinex own shares in the bank. One of the key points in the Crypto Anonymous post published a while ago was the fact that from January 2020 to September 2020 the amount of the foreign currencies held by all Bahamian domestic banks increased by $600 million while Tether issued about $5.4 billion worth of coins during the same period of time.
According to Pepin, Crypto Anonymous was looking for Deltec’s holding in the wrong place and explained that the Bahamas is an off-shore jurisdiction and that there are two categories of banks, international and domestic:
“In the domestic bank there is (sic) two type of license linked to it: you have what they call the authorized dealer license and the authorized agent license. Deltec do own an authorized agent license which is a license that allowed them to custody Bahamian dollars.”
Banks that are licensed are actually authorized agents and they are able to conduct trust and other fiduciary business for the residents and non-residents. Since Deltec doesn’t have an authorized dealer license, Pepin said that the bank can’t hold cash and deposits on Bahamian dollar:
“At the same time, because we cannot hold those Bahamian dollars, we cannot serve local customers. So what we have is we have, along with that authorized agent license, we have an international bank license, or I think it’s called restricted license as well.”
Deltec’s holdings are also not supposed to be reflected in the corresponding section of the central bank’s reports as Pepin said:
“We are not a domestic bank for the report of deposit. So we are not a domestic bank aside of that authorized agent license, but that is an irrelevant business for us, and not much must be reported.”
Speaking about the allegations that USDT will not be fully backed by an equal amount of US dollars as Pepin stated that each coin is backed by a reserve. The reserves are fully backed and even more than what is in circulation. Speaking about whether all the dollars that back USDT are held by the bank, he said that they are “held by Deltec and other institutions.” He continued:
“As far as I can tell, they’re [Tether] are following the regular treasury management you would imagine for managing such reserve. Nothing beyond what you would expect for treasury management.”
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