Dear Remarkl,

To be sure, Tether has never claimed fractional reserve banking as the status of the dollars it claims backs Tether.

If one studies the issuance schedule of Tether and its close relationship with Bitcoin, the relationship is far more complex and hard to determine on first inspection.

I would suggest that Tether should not be entitled to operate on the basis of a fractional reserve simply because it is neither a bank, nor subject to the stringent federal regulations that apply to a bank.

It neither provides loans nor does it pay out interest on deposits and because it is not subject to the level of regulatory scrutiny that a bank is, ought not to be entitled to fractional reserve banking — a privilege that should strictly speaking be reserved only to highly regulated entities.

Access and possession I would argue are hardly the same thing. The recent issues that Tether has had with Crypto Capital clearly demonstrate that.

Thank you for your thoughts on this issue.

Yours,

Patrick