I agree with Hueristic with respect to Tether. It is a basically a promise to pay USD without any of the safeguards in the regulated banking system. So one literally gets the worst of both worlds. If you want to hold USD then hold USD cash or a bank deposit up to the 250,000 USD FDIC maximum. If the deposit is uninsured then one better trust the financial institution holding the deposit. The same would apply to other fiat currencies, CAD, EUR, GBP etc.
I have something of a bee in my bonnet about this, and it's getting a little off topic, but one more comment and I'll shut up.
A promise to pay USD is specifically and explicitly what Tether is _not_, per the terms of service.
Safeguards? Safeguards are to make sure companies can and do keep their promises. Tether doesn't make any. Yes, unless you read the TOS you might get the impression from their site that Tethers are backed by money in the bank, and that you have the right to redeem Tethers, but the TOS say no right to redeem and helpfully resolve the conflict by specifying that if the site says one thing and the TOS another, the TOS wins. I don't know what the talk about Tether's reserves and whether they are actually are what Tether says they are has to do with anything - what does it matter if Tether holders have no legal claim on them?
I don't think many realize how all-encompassing Tether's disclaimers in their terms of service (
https://tether.to/legal) really are, e.g. you specifically cannot sue them for unjust enrichment. Why would that be in there? Any ideas?
It is a very valid point; however how a court of law will look at this is an entirely different matter. What they are in effect saying is: We have the corresponding amount of USD in a bank account; but the Tethers cannot be redeemed for said USD. This means there is no way to enforce the backing. In any event this is even more of a reason to stay well away from Tether, regardless of whether this TOS term is actually enforceable in a court of law.
a promise to pay, I did not bother reading the TOS. What is the point of doing due diligence on something one is not going to get involved with?