Quote from: TheQuin on January 22, 2018, 03:22:56 PM

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Edit: Reading it again that bfx_drew comment doesn't make any sense. To issue Tether there must be someone 'writing a cheque' for it. Not necessarily direct to Tether, they could deposit USD on an exchange and then the exchange buys from Tether.

Why would bfx_drew make a comment that doesn´t make any sense? He works for Bitfinex after all, therefore
he should be much more knowledgeable about the cryptocurrency scene than the average reddit user.

Let me explain what could be a possible course of events using a hypothetical example:
1. An altcoin exchange like Poloniex that has no fiat banking (= no fiat deposits = no inflow of actual fiat) makes a ton of income due to trading fees
2. Let´s assume they make 20M $ in a month from a few trading pairs
3. The fee income is collected as cryptocurrencies, because no fiat has ever entered Poloniex (see 1.)
4. Poloniex doesn´t want to hold the cryptocurrencies and instead transfers the ownership of a basket of
cryptocurrencies worth 20M $ to Tether
5. Tether issues 20M $ of USDT, which are backed by the cryptocurrencies (and not by actual fiat deposits)
...

This would explain where all the more than 2 billions USDT are coming from. These altcoin
exchanges are making a killing and certainly have that kind of money (and they obviously have a
huge need for a stable-currency as they don´t want to hold all their income in volatile
cryptocurrencies and can´t easily convert that kind of money on the exchanges / OTC markets).
As mayax correctly points out it is extremely unlikely / basically impossible that institutional investors have wired that kind of money to Tether.
This would also explain why Tether issues new USDT in spite of closing registrations at Tether.to for months.

This is of course only one of the use cases of Tether, it obviously serves other purposes as well.
But this is the most likely explanation for the whole situation if you ask me.