dulapbot: Logged on 2024-12-05 02:10:14 mats: they’ve been printing money on the 100+bn usd in yield from the treasuries they’re holding. and considering the size of the Eurodollar market (prob in excess of 18tn today), and tether’s market dominance (around 66%) in stablecoins, I think it’s plausible they’ll be earning around 2-3% yield on a trillion dollars in treasuries behind issued usdt in the next decade. they could face competition from other issuers sharing yield
Vex: it's like some half arsed business model from bctalk
Vex: kyc indeed. treasury knows they're a good customer
Vex: aren't their books notoriously un-public too?
mats: they're a private outfit and under no obligation to open their books
Vex: i'd be tempted to negotiate the rate with those kinda numbers
Vex: "hey, about those indexed bonds.."
mats: there's no evidence they're holding inflation-indexed bonds
mats: anyway, we could very well go back to a ZIRP environment and then they get ruined by duration risk
mats: but right now they're by far the most profitable org by headcount on earth
Vex: I wonder if the desk jockeys get paid okay
mats: looks like they might have been more profitable than goldman this year
mats: forget blackrock, they're basically running a charity over there with their expense ratios
Vex: lol
Vex: what's stopping a copypaste, if their shit's so simple?
mats: which org
Vex: t
mats: i never said anything was simple
mats: the key to outcompeting incumbents is you have to offer something they don't in order to take their market share
mats: that's also the problem
mats: they can just adopt the mechanic you're using and crush you with inertia
mats: this is the key that all the social media outfits before fb was missing
mats: were missing
Vex: which mechanic? getting big?
mats: in the specific case of tether, as i said before, new stablecoin entrants could (and, i think, are) offer treasury yield sharing to users as a market differentiator
mats: and tether can do that too
Vex: mebbe they need it for `who they know'
mats: in the case of facebook, meta adopted stories, messenger day, and slingshot (learned from snapchat), reels (tiktok), live audio rooms (clubhouse)
mats: facebook/meta
Vex: what cool shit does tether have? you can walk into kings roman and spend it?
mats: facebook marketplace (craigslist), facebook live (periscope), facebook dating (tinder/bumble)
mats: the killer feature of tether is simple -- v low fee (compared to all alternatives) cross-border payments with dollars
mats: people use it for payments too but i'm not super familiar with that beyond what's in public reporting
mats: i don't live in a place that has issues with getting dollars
mats: retail payments
Vex: I only use aud unless i'm overseas.
Vex: you could prolly hand me a fake benjamin. I might not know
mats: its hard to understate how useful usdt is, and how dangerous it is to governments with capital/currency controls
Vex: oh yeah
mats: extremely difficult to interdict short of draconian intervention in citizens usage of the internet
Vex: I was wondering how it was legal, but reading your shit yesterday, it kinda clicked
mats: normally it is impractical or impossible for billions people to get physical dollars or usd via bank accounts, because their financial institution won't let them acquire it, they don't have a bank at all, the friction is extremely high (fees and limits), their local govt won't allow them to get it owing to currency controls and an interest in preventing capital flight, currency runs, and speculative attack against the local currency
mats: its going to be a shit show
mats: and all of this adds up to oxygen for the reich
mats: this is why the americans haven't crushed tether despite the fact the operators are in bvi and eu
mats: they're creatures of the empire
mats: we haven't even gotten to the stage where wall st has begun formal tokenisation of traditional assets
mats: which will only accelerate capital flows into the empire
mats: i don't have any interest in it but you could probably find a million people on the planet who want a piece of trump tower's earnings from tenant leases or whatever cre shit
mats: maybe a hundred million people
mats: there's serious regulatory hurdles and not given it will happen but use your imagination as to how far this financialisation could go
mats: and the incentives that exist for owners to do it
mats: yes there would be an extreme response to it by strong, autocratic states, but capital naturally interprets restrictions as damage and routes around it
Vex: i literally can't imagine, i'm mid range financially literate on a good day. I don't think anyone's in charge
mats: to abuse the expression about internet routing around censorship
Vex: oh yes. that
mats: a quarter trillion usd in capital exited china since covid
mats: the most awesome and expansive surveillance state in the history of human civ
mats: http://archive.today/2024.10.26-220330/https://www.wsj.com/world/china/china-economy-capital-flight-2ba6391b
mats: actually, correction, it happened in a single year
mats: billions of people naturally have incentive to seek safe (or productive) harbour for their capital and the internet and crypto will make it possible
mats: even if four billion of those people only have like $3000 in wealth apiece
mats: or whatever the number is
mats: thanks for coming to my ted talk
Vex: thanks for putting it on. real chin scratcher
mats: long live the reich
Vex: lol. keep winning mats