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The New Fiat? How Tether May Be Recreating the Old Deception in Crypto

by Ram ben Ze’ev


The New Fiat? How Tether May Be Recreating the Old Deception in Crypto
The New Fiat? How Tether May Be Recreating the Old Deception in Crypto

The New Fiat Masked in Crypto

When Bitcoin was born, it was supposed to be a revolt — a monetary system free from central banks, free from arbitrary inflation, a digital gold beyond manipulation. Yet today, we may be watching a new version of fiat currency emerge — not issued by Washington or Frankfurt, but by Tether.


In early October, blockchain monitors observed the sudden minting of two billion dollars’ worth of Tether. No new wealth was created. No trade occurred. The tokens appeared, as if conjured from thin air. Almost immediately, speculation spread that this was not a neutral accounting manoeuvre but rather an injection of artificial liquidity, flowing into Bitcoin and giving the illusion of organic demand.



The Mechanics of Illusion

Tether has positioned itself as the anchor of the crypto economy. Each token, it claims, is backed by reserves. Yet the act of minting billions at a stroke reveals a deeper danger. With a few keystrokes, vast sums are created, indistinguishable on the market from tokens backed by genuine deposits.


This practice, whether justified as “inventory replenishment” or “liquidity management,” effectively grants Tether the powers of a central bank without the transparency or accountability. When those tokens flow into exchanges, they become indistinguishable from real capital — pushing up demand, lifting Bitcoin’s price, and convincing investors that enthusiasm is building, when in fact it may be nothing more than manipulation.


A False Economy

The great irony is that Bitcoin was meant to free us from fiat’s false economy. Central banks print at will, devaluing currencies, and citizens pay the price through inflation and lost purchasing power. Cryptocurrency promised something different: a transparent, finite supply, immune to the whims of any authority.



But if Tether can print billions from nothing and pour them into Bitcoin, then we are witnessing the very deception crypto was supposed to eliminate. This is not decentralisation, but the recreation of fiat in digital dress — a system propped up not by market demand, but by manufactured liquidity.


The Fiat Parallel

The unsettling truth is that fiat markets are no better. At the same time Tether minted its billions, the Federal Reserve injected five billion dollars into the U.S. banking system overnight through quantitative easing. The technical language may differ, but the result is the same: conjuring money from nothing to prop up a market that might otherwise falter.


This practice of printing to save the system has been normalised in traditional finance for decades. Now, crypto appears to be adopting the same playbook. What was promised as an escape from fiat illusion is being bent into its mirror image — both systems running on artificial demand, both reliant on injections of phantom liquidity.


Why This Should Alarm Everyone

The implications extend far beyond Bitcoin traders. Tether is now a major player in global finance, holding significant reserves in government debt instruments. If its stability is ever called into question, the shockwaves will not remain in the crypto markets. They will spill into the traditional financial system.



That the United States government would allow, and potentially rely upon, such mechanisms — whether through a stablecoin issuer or through its own central bank — should alarm every citizen. Public money could find itself entangled in structures with none of the safeguards demanded of banks, and all of the risks of unchecked issuance.


Recreating Fiat’s Worst Habits

The story of Bitcoin is meant to be one of liberation: a hedge against inflation, a defence against manipulation, a way out of the cycle of endless printing. Yet today, it risks becoming the stage for a cruel irony — that the very tool designed to free humanity from fiat is being manipulated with the same tricks.


We are told this is the future of money. But if that future is built on minting from thin air and propping up markets with artificial demand, then we have not escaped the old system at all. We have simply re-created it, this time with fewer rules, less accountability, and no safety net.



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