Tether’s peg to the greenback was initially predicated on the declare that the digital currency was fully backed by actual money reserves — a greenback held in reserve for every tether issued — although this was later proven to be a lie. The company has since continuously revised down claims about how much cash they hold in reserve. Their newest public attestation on the matter, from March of last year, claimed to be holding solely three % of their reserves in cash. The relaxation was held in “cash equivalents,” principally commercial paper — essentially IOUs from companies that will or may not exist, given that reputable actors buying and selling in business paper don’t look like doing any business with Tether. The level of this course of is to make including new blocks so troublesome that meddling with the blockchain is prohibitively costly.