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The more that other fiat devalues, more people will use USDT

And the more profits Tether makes

The more bitcoin they'll buy as a result

And the more that Bitcoin grows in value, the more the proportion of value which Bitcoin backs USDT grows

And at some point, the value of Bitcoin that backs USDT > value of US Treasuries that backs USDT

And now you essentially have a currency that is backed by Bitcoin

What am I missing here?

it’s a lot of centralization and control for one company, not that the fed is any better

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True but it's not like there's going to be just one stablecoin issuer that does this

Wouldn't be surprised if Circle does this as well

fingers crossed for competition and freedom to choose

Might be difficult in this case considering Tether’s network effects though. So your concern about centralization is valid.

It’s more of a policy problem where the USG needs to get out of the way of other Stablecoin issuers and let them compete.

it’s most likely going to be a case of “new king, same as the old king.” either way, everyone without bitcoin is going to be subordinated

Luckily it won’t be that hard for them to switch when they realize it and free themselves