Tether has existed for under a decade, USDC is less than 5 years old, and SVB died after 39 years.
Yes technically "still alive" is better than "just died", but can you really call it a "better track record" when Tether is so opaque that we wouldn't be able to spot if it was about to die until it actually happens? If Tether died tomorrow it would undeniably have a worse track record than SVB, if it dies in a decade then it survived half as long as SVB.
Unless you have some insight into the actual behind the scenes finances of Tether I don't see how you can make that judgement.
And as to this claim from your GP's comment:
> In the near future, stablecoins like USDC will become immune to bank runs because the US Dollar reserves backing them will be held in vehicles that don't loan out the reserves and hold short-duration treasuries directly with the Treasury Department.
Circle (USDC) literally had $3.3B cash deposited at SVB, and presumably more accounts at other banks, so they're exposed directly to potential problems caused by those banks. More importantly they could decide tomorrow, assuming they haven't already, to make the exact same poor choices as any bank could.
There's nothing stopping them moving 95% of their assets tomorrow into 10 year treasury bonds other than that it would be a bad idea, but both they and banks are equally motivated to avoid bad ideas, so it seems to be an unwarranted hope that those in charge of Circle will make better decisions than those in charge of any bank, rather than any specific feature of USDC that makes it impossible for them to make the exact same mistake SVB made?
And that's even before considering that if it had been USDC rather than SVB that made the mistake already, FDIC wouldn't have come running in to fix anything as they try to with failed banks.
Am I missing something about USDC that actually makes it a safer bet, other than apparently having more faith in their management team than in the management teams of various banks?
Yes technically "still alive" is better than "just died", but can you really call it a "better track record" when Tether is so opaque that we wouldn't be able to spot if it was about to die until it actually happens? If Tether died tomorrow it would undeniably have a worse track record than SVB, if it dies in a decade then it survived half as long as SVB.
Unless you have some insight into the actual behind the scenes finances of Tether I don't see how you can make that judgement.
And as to this claim from your GP's comment:
> In the near future, stablecoins like USDC will become immune to bank runs because the US Dollar reserves backing them will be held in vehicles that don't loan out the reserves and hold short-duration treasuries directly with the Treasury Department.
Circle (USDC) literally had $3.3B cash deposited at SVB, and presumably more accounts at other banks, so they're exposed directly to potential problems caused by those banks. More importantly they could decide tomorrow, assuming they haven't already, to make the exact same poor choices as any bank could.
There's nothing stopping them moving 95% of their assets tomorrow into 10 year treasury bonds other than that it would be a bad idea, but both they and banks are equally motivated to avoid bad ideas, so it seems to be an unwarranted hope that those in charge of Circle will make better decisions than those in charge of any bank, rather than any specific feature of USDC that makes it impossible for them to make the exact same mistake SVB made?
And that's even before considering that if it had been USDC rather than SVB that made the mistake already, FDIC wouldn't have come running in to fix anything as they try to with failed banks.
Am I missing something about USDC that actually makes it a safer bet, other than apparently having more faith in their management team than in the management teams of various banks?