Illustration: Sarah Grillo/Axios

Money needs to be able to buy stuff. That's always been a problem with cryptocurrency. The number of merchants who accept bitcoin directly is small, and converting bitcoin to cash dollars is nontrivial.

Background: The biggest cryptocurrency-to-dollars exchange in the early years of bitcoin was Mt. Gox, which imploded spectacularly in February 2014. Since then, the conversion problem has remained a very hard nut to crack, which is one reason why bitcoin derivatives were invented: You can now buy exposure to bitcoin without having to buy the currency itself.

Tether is the popular workaround for smaller traders, or people who want to trade non-bitcoin cryptocurrencies. Trading between cryptocurrencies has always been much easier than converting crypto to dollars. So Tether was invented as a cryptocurrency that would always be worth $1. Traders could easily use Tether instead of trading in and out of dollars — which is exactly what they did. Volume in Tether often exceeds volume in bitcoin itself.

  • Every Tether was ostensibly backed by a dollar in a bank account. Theoretically, all Tethers could be converted to an equal number of dollars. But the actual conversion was much harder, and it involved a payments processor in Panama named Crypto Capital Corp. According an explosive new lawsuit from the New York attorney general, Crypto Capital Corp looks very much like it was a fraud, and some $850 million seems to have disappeared.

The most interesting part of the story: In the wake of this week's revelations, the price of Tether basically didn't move. Even Tether itself no longer claims that all tokens are backed directly with dollars — but the price of one Tether is still $1.

The big picture: All currencies are ultimately based on faith — a largely unspoken and implicit agreement within a population that a certain token is a measure and store of value. Tether has clearly achieved that status within the crypto crowd. No one would ever convert their dollars into Tether for safekeeping. And yet, even after the latest revelations, Tether remains the terra firma of the crypto world, just because it's a highly liquid instrument and everybody agrees that it's worth $1.

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Updated 42 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 32,844,146 — Total deaths: 994,208 — Total recoveries: 22,715,726Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 7,078,798 — Total deaths: 204,497 — Total recoveries: 2,750,459 — Total tests: 100,492,536Map.
  3. States: New York daily cases top 1,000 for first time since June — U.S. reports over 55,000 new coronavirus cases.
  4. Health: The long-term pain of the mental health pandemicFewer than 10% of Americans have coronavirus antibodies.
  5. Business: Millions start new businesses in time of coronavirus.
  6. Education: Summer college enrollment offers a glimpse of COVID-19's effect.

Graham hopes his panel will approve Amy Coney Barrett by late October

Sen. Lindsey Graham during a Senate Judiciary Committee hearing on Sept. 24, 2020 in Washington, DC. Photo: Win McNamee/Getty Images

Senate Judiciary Committee Chair Lindsey Graham (R-S.C.) told Fox News Saturday he expects confirmation hearings on Judge Amy Coney Barrett's nomination to the Supreme Court to start Oct. 12 and for his panel to approve her by Oct. 26.

Why it matters: That would mean the final confirmation vote could take place on the Senate floor before the Nov. 3 presidential election.

Texas city declares disaster after brain-eating amoeba found in water supply

Characteristics associated with a case of amebic meningoencephalitis due to Naegleria fowleri parasites. Photo: Smith Collection/Gado/Getty Images

Texas authorities have issued a warning amid concerns that the water supply in the southeast of the state may contain the brain-eating amoeba naegleria fowleri following the death of a 6-year-old boy.

Details: The Texas Commission on Environmental Quality issued a "do not use" water alert Friday for eight cities, along with the Clemens and Wayne Scott Texas Department of Criminal Justice corrections centers and the Dow Chemical plant in Freeport. This was later lifted for all places except for Lake Jackson, which issued a disaster declaration Saturday.